New airline starts operations next year
JAKARTA (JP): Newly licensed air carrier Indonesian Airlines Avipatria (IAA) will launch its first domestic flight early next year to benefit from the country's economic recovery, an airline executive said on Tuesday.
Airline president Rudy Setyopurnomo said the new airline would start commercial operations in January 2000, serving 30 destinations across the country.
"This is a good business with a good market. We are optimistic that we will be able to maintain an average load factor of at least 60 percent in our first year of operations," he told The Jakarta Post.
Rudy attributed the airline's optimism to an expectation that the country's economy would significantly recover next year in line with the improved political stability following the establishment of the new government under President Abdurrahman Wahid.
He said he expected the profit margin would be about five percent of its total revenue during the first year of operations.
Indonesia currently has four regular airlines: state-owned Garuda Indonesia and Merpati Nusantara Airlines and privately owned Bouraq and Mandala Airlines. At least 53 charter airlines serve 134 routes to over 90 destinations across the country.
The four airlines, which serve about 65 of the total routes, have an average load factor of between 61 percent and 65 percent in a nine-month period of the year.
Rudy said his airline would initially operate with ten Boeing 737-200s and focus its business on domestic destinations, including those in Indonesia's eastern provinces.
"We are currently undergoing intensive negotiations with overseas parties to lease the ten Boeings," he said, adding that the airline was expected to spend up to US$125,000 in monthly aircraft lease fees for one.
He said the airline was set up earlier this year with investments totaling $40 million. It was awarded the license by the Directorate General of Air Transportation of the Ministry of Communications in September, he added.
In addition to Indonesian Airlines, the government has also awarded a license to existing charter airline Pelita Air Service to offer regularly scheduled services.
Another new carrier, Mentari Airlines, is expected to be awarded a license this year. Pelita Air and Mentari are expected to start operations some time next year.
Rudy said most destinations the airlines would fly to were previously serviced by the now defunct Sempati Air.
Sempati Air used to serve 24 domestic flights and five international flights to Kuala Lumpur and Penang in Malaysia, Perth and Christmas Island in Australia, Singapore, Kaoshiung and Taipei before it halted operations in June last year after shareholders failed to keep it afloat.
Sempati operated a fleet of 25 leased aircraft and employed 3,500 workers at its peak in 1996, a time when it was labeled the country's largest private air carrier.
Sempati was founded in 1989 and owned by Malaysian-Indonesian joint venture Asian Aviation Inc. (40 percent), Indonesian Army's PT Tri Usaha Bhakti (Truba) (25 percent), tycoon Bob Hasan (20 percent) and the Humpuss Group, controlled by the youngest son of former president Soeharto, Hutomo Mandala Putra (15 percent).
Rudy refused to reveal the names of shareholders of the new airline.
He said Indonesian Airlines would cooperate with Garuda Indonesia for its air crew training, aircraft service and maintenance, ground handling and catering service.
Rudy served in Garuda Indonesia as vice president for corporate planning in 1992.
He said Indonesian Airlines was currently recruiting a thousand people to fill positions of pilot, cabin attendant, engineer and ground staff. (cst)