Open-sky policy mulled to lure more tourists

JAKARTA (JP): The government is currently studying the possibility of introducing a limited open-skies policy which will open up all domestic routes to international carriers, in a bid to attract more foreign tourists.

A reliable source in the tourism industry said on Tuesday that the new policy would be part of a tourism package which is currently being deliberated by the Ministry of Tourism, Arts and Culture, and the Ministry of Communications.

The package was proposed by tourism-related industries, including the Association of Indonesian Tour and Travel Agencies, the Indonesian Tourism Board, and the Indonesian Hotel and Restaurant Association, said the source, who requested anonymity.

The government would receive inputs from the airline industry during the deliberations, the source said.

"The sooner the draft is completed the better," he said.

A colleague in the tourism industry said he expected the draft to be completed by late next week before being proposed to the President for final approval.

According to the draft, foreign airlines will be able to land at any destination in Indonesia provided the plane flies directly from its country of origin without picking up passengers at any stopovers.

The rule will apply to both scheduled and chartered planes.

Flights which enter the country through Biak airport in Irian Jaya and Batam in Riau will be allowed to fly on to another international airport in the country. They will also be permitted to pick up passengers and cargo at both Biak and Batam airports.

"The concern is that the visitors that the airplanes carry would not likely stay in Biak or Batam, so the two places will only function as an entry points," the source said.

Foreign airlines would be able to sell tickets for the return leg of chartered flights, the source said, adding that this was an incentive to encourage airlines to bring visitors into the country.

"If we don't do this, nobody will fly in, besides, when the conditions get better, the presidential decree can always be altered," he said.

The government is also considering letting national airlines share their flag ownership with foreign airlines and even sell their majority stakes, as long as the airlines are registered in Indonesia and carry the national flag.

Dangers

On Monday, the president of state-owned flag carrier Garuda Indonesia, Robby Djohan, warned of the dangers of opening up domestic routes to international carriers, if the country did not get equal facilities in return.

"Domestic routes are the government's assets, we will be very stupid if we just let go of them without getting compensation of equal value. It must be a win-win situation," he said.

He said the government should not open up routes to areas that were not tourist destinations, such as Palembang (South Sumatra) and Padang (West Sumatra).

"Tourists go mostly to Bali, Yogyakarta, and several other places, if we open the Padang and Palembang routes, what will we get in return from the other countries?" he said.

The current draft presidential decrees also stipulates that the government will make tourism promotional activities tax deductible.

Rehabilitation

The secretary-general of the Association of Indonesian Airlines (INACA) said the government had set up a team consisting of officials and industry representatives to help local carriers recover from the crisis.

"The team was formed this month and it will have three months to work with the airlines," he said.

Members include officials from the ministries of tourism, arts and culture; finance; communications; industry and trade; the National Development Planning Board, the Investment Coordinating Board, the Central Bank, and representatives from the airline and tourism industry.

It is headed by Director of Airline Safety at the Ministry of Communications Iing Iskandar.

The agency will focus on helping the ailing airline industry boost the tourism sector in a bid to earn foreign revenue. It will work on getting capital injections from foreign investors.

"The airline industry needs only Rp 5 trillion (US$676 million) to weather the crisis, while the tourism industry need about Rp 2 trillion," he said .

The country's five operating commercial airlines are facing financially difficulties because their dollar-denominated operational costs have risen while income from domestic routes has dropped drastically. (das)