Open-sky policy mulled to lure more tourists

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)