New open sky policy won't hurt local carriers, says INACA

JAKARTA (JP): The Indonesian National Air Carriers Association (INACA) said on Friday that the government's plan to allow foreign airlines to enter all parts of the country from their home base would not harm local carriers.

INACA's chairman Soelarto Hadisoemarto said anyway not all the country's airports had the facilities to safely receive large airplanes of the type normally operated by foreign carriers.

"We support the plan to open airports to foreign airlines, especially those located near the main tourists destinations, because of our limited capacity as a result of the economic crisis," he told The Jakarta Post.

President B.J. Habibie said on Thursday that the government would allow international air carriers to enter all parts of the country in a bid to boost the ailing tourist industry.

Habibie said all foreign airlines would be allowed to fly visitors from their home base to any destination in Indonesia.

However, Soelarto warned the government against allowing foreign airlines to serve domestic routes, saying that any such move would be the death knell of the country's airlines, all of which are facing severe financial difficulties as a result of the collapse in the value of the rupiah against the U.S. dollar.

"If foreign airlines start to fly domestic routes it would kill us," he said.

Tourist arrivals have fallen sharply in the face of sporadic outbreaks rioting and looting around the country, much of it generated by the worst economic crisis in 30 years.

Local tourist businesses have claimed that opening more domestic routes to international carriers would help boost visitor arrivals.

The national flag carrier Garuda Indonesia and the state-owned Merpati Nusantara have both cut the frequency of their flights. In June, the country's largest private airline, Sempati Air, was forced to close down.

Garuda spokesman Pudjobroto said the plan laid down a challenge to his company to improve its services.

"Garuda will have to provide a better service to its consumers because the market will now be very competitive. I believe we will be able to rise to the challenge because we are currently undertaking a massive restructuring program," he told the Post.

Soelarto said he doubted the open sky policy would encourage more foreign airlines to fly to the country.

Most of the world's major airlines already served major cities in the country, he said, adding that 23 airports were currently open to a select number of international airlines but not all these routes were served due to low load factor.

Airports served by foreign carriers include Jakarta, Denpasar (Bali), Surabaya (East Java), Batam (Riau), Medan (North Sumatra), Palembang (South Sumatra), Padang (West Sumatra), Ujungpandang (South Sulawesi), Manado (North Sulawesi), Balikpapan (East Kalimantan) and Pontianak (West Kalimantan).

Soelarto said the main factors which determined tourist arrivals in the country were political and social stability not the seat capacity of carriers serving the country.

Many foreign airlines have in the past complained about not being able to fly directly to Bali, the country's number one tourist destination. (gis)