Indonesian airlines fear competition of Singapore
Indonesian airlines fear competition of Singapore
JAKARTA (JP): Indonesian airline companies are afraid that the
hub for international flights from and to the country may shift
from Jakarta to Singapore because of the latter's more extensive
connections to international destinations.
Because Singaporean airline companies have been granted rights
to fly directly to more than a dozen cities in Indonesia, people
intending to go to Europe or the United States may prefer transit
in Singapore instead of Jakarta, Benny Rungkat, secretary-general
of the Indonesian National Air Carriers Association, said
yesterday.
Rungkat said the role of Indonesian airlines might eventually
be reduced to that of feeder services because Singaporean
carriers are now flying directly to 13 cities in Indonesia.
The service expansion of Singaporean airlines in Indonesia
was made possible under a bilateral air agreement signed in
Yogyakarta in September.
The Indonesian Air Carriers Association is now afraid that the
new air agreement may give more benefit to Singapore than to
Indonesia.
"The cheaper price of aviation turbo fuel in Singapore will
also encourage more international air carriers to make Changi
airport a hub for passengers traveling to Indonesia, Antara news
agency quoted Benny as saying.
Under the bilateral air agreement, Indonesia is allowed to
assign two more airlines -- Bouraq Indonesia and Mandala Airlines
-- to serve Singapore. Three Indonesian airliners, Garuda
Indonesia, Merpati Nusantara and Sempati Air, have been serving
Singapore.
The agreement in turns gives rights to Singapore Airlines and
SilkAir to fly directly to nine more cities in Indonesia, thus
increasing coverage to a total of 19 cities they can serve in
Indonesia.
The two Singaporean airlines now serve only 13 Indonesian
cities: Denpasar, Medan, Surabaya, Manado, Padang, Pekanbaru,
Pontianak, Ambon, Biak, Jakarta,as well as Solo in Central Java,
Mataram in West Nusa Tenggara and Ujungpandang in South Sulawesi.
The airlines also have the option to fly to Japan or the North
Pacific and Canada.
"But I should also admit that the two Singaporean airlines are
better prepared, notably with regard to their fleet, for
utilizing the wider opportunities generated by the new
agreement," added Rungkat, who is also vice president of Bouraq.
He suggested that Indonesia's national flag carrier, Garuda,
enter into a strategic alliance with Singapore Airlines to
strengthen its competitiveness in international services.
"Such an alliance, I think, is quite essential to prevent
Garuda from degenerating into just a feeder airline in view of
the keener competition in the international air service," Rungkat
said.
If necessary, he added, Garuda should buy a portion of
Singapore Airlines's shares or offer a portion of its shares to
the Singapore carrier.
Minister of Finance Mar'ie Muhammad said recently that the
government is allowing Garuda to bring in a new shareholder as a
strategic partner in strengthening its capital and operations.
The new shareholder, which will be selected through an open,
competitive bid, should be a foreign company, Mar'ie told a
recent hearing with the House of Representatives.(icn/vin)