Govt insists on licensing more airlines

Govt insists on licensing more airlines

JAKARTA (JP): The government defended on Friday a recent
decision to allow more scheduled airlines to operate in the
country.

Secretary General of the Ministry of Communications Anwar
Suprijadi said the decision was taken in a bid to promote fair
competition in domestic airline services.

Permitting more scheduled airline operators would not hurt the
existing operators, he said, adding that there were plentiful
opportunities to open new routes in the vast archipelago.

"The decision will instead encourage the existing scheduled
airline operators to promoted their services," he said.

Newly established Indonesian Airlines Avipatria recently
obtained a license to operate scheduled flights on 46 routes,
most of which were previously served by the defunct Sempati Air.

The Ministry of Communications is expected later this year to
award similar licenses to Pelita Air Service, a chartered airline
operator owned by state oil and gas company Pertamina, and new
air carrier Mentari Airlines, which will provide scheduled
flights.

Indonesian Airlines said it would commence operations in
January 2000, while Pelita and Mentari are expected to follow
suit in the same year.

The National Air Carriers Association (INACA) criticized last
week the government's policy on scheduled airlines, describing
the move as "ill-timed".

INACA's outgoing chairman Soelarto Hadisoemarto said the
country's scheduled airline industry did not need new air
carriers. He said their condition remained vulnerable after the
downturn caused by the prolonged economic crisis.

Soelarto said the sharp depreciation of the rupiah to the U.S.
dollar from late 1997 hurt the industry because most airlines'
rupiah earnings were eaten up by overhead costs, over 80 percent
of which were quoted in U.S. dollars.

However, newly elected INACA chairman Wahyu Hidayat
acknowledged on Friday that the entrance of new scheduled
airlines could not be avoided.

"We are in the globalization era. Sooner or later we are going
to meet more competitors," he said after being elected as
chairman at an INACA members meeting.

Indonesia has five scheduled airlines, namely state-owned
Garuda and Merpati Nusantara Airlines and privately-owned Bouraq,
Mandala and Dirgantara Air Service, as well as 56 chartered air
carriers.

Anwar said that in order to help the ailing local airline
industry, the government would soon revoke a government decree,
which requires the industry to buy light aircraft from IPTN, the
state-owned national aircraft manufacturer.

Under the regulation, the local airlines must also obtain
approval from the Ministry of Communications, the office of the
state minister of research of technology, and the president to
buy wide-bodied jets. (cst)