New airlines operates without license

Apriadi Gunawan and Debbie A. Lubis, The Jakarta Post, Medan/Jakarta

The newly created Sumut Airlines began commercial flights, this week despite the fact that it has not yet obtained either a business or a flight license from the ministry of transportation as is required by law.

Despite those seemingly major details, the maiden flight from Ferdinand Lumban Tobing airport in Central Tapanuli regency to Polonia airport in the provincial capital of Medan was presided over by none other than Minister of Transportation Agum Gumelar on Monday.

S. Eddy Wibowo, the director of airlines affairs at the Directorate General of Air Transportation at the Ministry of Transportation, told The Jakarta Post on Tuesday that the ministry had not yet issued business or flight licenses for Sumut Airlines.

He refused to discuss Agum's bizarre inauguration of the airline, even though his ministry had not yet approved it.

M. Syukur, a legal expert at the ministry, confirmed that Sumut Airlines had not been registered as one of operating airlines companies in the country.

"To run commercial flights, all airlines are required to obtain a business license and the Air Operator's Certificate from the Ministry of Transportation before any can get approval to operate," Syukur told the Post.

But one of the company's founders who requested anonymity played down the absence of license.

"It's no big deal, we will take care of it later. The most important thing is the airline is up and running. If we had to wait for the license that would mean less time flying," he explained.

He added that he did not know what kind of business institution would manage the daily operation of the airline.

The airline was purchased by the North Sumatra provincial administration, with stakeholders comprising seven regencies located along the province's west coast, namely Central, North and South Tapanuli, Mandailing Natal, Padang Sidempuan, Nias and Sibolga. Each will invest Rp 3.5 billion each year for operational expenditures.

They, however, have yet to discuss when and how their shares would pay dividends.

North Sumatra governor T. Rizal Nurdin said that the stakeholders would subsidize the airlines for two years by contributing the fund to be taken from each administration's respective development budget allocation.

"The subsidy will be given until the load factor reaches a level that enables the airline to finance its own operating costs," he said.

A provincial administration spokesman, Hakimil Nasution, said that the company would use chartered 40-seater Fokker-27 planes from Kuala Lumpur-based Rabin Global Air Servindo.

There are two flights everyday plying a single route from Tapanuli's Ferdinand Lumban Tobing airport, formerly named Pinangsori to Medan.

The airline is aimed at providing businesspeople access to remote and isolated west coast areas.

It takes seven hours to reach Central Tapanuli from Medan using land transportation, compared to just 30 minutes by flight.

Syukur, however, warned of legal consequences of running an airline without license, which carries a maximum jail term of one year or a maximum fine of Rp 36 million according to the Law No. 15/1992 on Air Transportation.

Article 13 of the law also states that the use of foreign aircraft from or into the country should be based on a special license released by the government. The violation of the ruling carries a maximum jail term of five years and a fine of Rp 60 million.