Limit foreigners in airline sector: Official

Limit foreigners in airline sector: Official

JAKARTA (JP): Restrictions on foreign investment in
Indonesia's airline industry should be retained to prepare local
airlines for the free trade area, a senior official at the
Ministry of Communications said on Wednesday.

"Give local companies a chance to prepare themselves in this
capital-intensive and high technology industry. Later, they will
be able to compete freely in the global era," Director-general of
Air Communications Soenaryo Yosopratomo told Antara on Wednesday.

He was commenting on Presidential Decree No. 96 issued on July
20 which provides a list of industries where foreign investors
are either barred or restricted. In the airline industry, foreign
investors cannot own more than 49 percent of an airline company.

The decree may be reviewed following strong protests from
Internet-related companies who have objected to the ban on
foreign investment in the multimedia sector. It is not clear
whether a review of the decree will affect other sectors also.

About 60 airline companies, mostly chartered helicopter
operators, operate in the country at present. There are 12
scheduled airline companies.

Anwar Suprijadi, secretary-general of the communications
ministry, cited "national interests" as the reason for
restricting foreign investment in the airline industry.

He warned that if foreign companies took controlling shares in
a local airline, they could refuse to fly to isolated towns and
therefore disrupt transportation services in the area.

Rusdi Kirana, president of PT Lion Mentari Air (Lion
Airlines), said separately that foreign investors were not
interested in the local airline business.

And they won't be as long as Indonesia is still in an economic
crisis and facing political instability, he said.

"The airline business is a long-term activity. It would not be
possible to operate under unstable conditions," said Rusdi, whose
airline is one of seven new operators of scheduled services.

Rusdi said the earliest investors were likely to come was five
years, and then only if the situation was considered safe and
stable. (10)