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)