New airlines may lose licenses in 12 months if...
JAKARTA (JP): New airline companies will lose their licenses if they do not operate within 12 months after the issuance of their permits, a senior aviation official said on Wednesday.
Director General of Air Transportation at the Communications Ministry, Soenaryo Yosopratomo, said that three of seven new airline companies licensed in June had yet to operate.
The three inoperative scheduled airline operators included PT Indonesian Airlines Avia Patria, PT Airmark Indonesia, and PT Rusmindo Internusa Air, he said.
"Avia Patria will begin operations in December, while Airmark and Internusa are operating unscheduled flights," Soenaryo told a hearing with the House Commission IV for infrastructure and transportation affairs.
He said that Airmark and Internusa, which operated unscheduled flights before applying to become a scheduled air carrier, should operate their scheduled flights within 12 months or their licenses will be forfeit.
The three airlines are part of seven air carriers licensed in June to operate scheduled flight services. Four of them -- PT Bayu Indonesia Air, PT Awair Internasional, PT Lion Mentari Airlines, PT Pelita Air Service -- have started operations.
He said of 45 companies licensed for unscheduled flights, 21 are operational and of the 44 licensed non-commercial flight companies, 30 are operational.
The entrance of the new airlines has caused tough price competition among the companies serving domestic routes, especially on the Jakarta-Pontianak, Jakarta-Surabaya, Jakarta- Medan, Jakarta-Makassar, and Jakarta-Balikpapan routes, Soenaryo said.
"Airlines were competing by giving discounts of around 15 percent to 45 percent under the price set by INACA," he said, referring to the Indonesian Air Carriers Association that has the right to set the price for airline tickets.
INACA, with acknowledgements from the Minister of Transportation and Communications, Agum Gumelar, and the House, has set a limit to the price operators can charge so that they would not underprice their tickets and undermine the industry.
INACA chairman Wahyu Hidayat said that ticket prices had to conform to exchange rates of between Rp 4,000 ($0.44) and Rp 7,500 per dollar.
"So, the price of an airline ticket to Surabaya from Jakarta would range between Rp 375,000 ($41.6) to Rp 670,000," he said, adding that every operator was required to publish their prices to the public to ensure fairness of competition. (tnt)