RI to limit acces to foreign budget airlines

RI to limit acces to foreign budget airlines

Agence France-Presse, Jakarta

Indonesia is to impose new restrictions on foreign budget
airlines flying to key cities such as Jakarta and Bali to protect
its own operators in the face of fierce competition, reports said
on Wednesday.

Minister of Transportation Hatta Radjasa said the new
regulations would remain in place until Indonesia had resolved
disputes with other national aviation authorities over the
booming low-cost air industry in the region.

"We issue the decision this year and it will be valid until we
have new agreements with foreign countries applying the low-cost
carrier concept to fly to and from Indonesia," he said, according
to the state Antara news agency.

Hatta said the government would close off airports in four
cities -- Jakarta, Medan in North Sumatra, Surabaya and Denpasar
-- to further budget flights by foreign operators.

He said the government would also temporarily bar foreign low-
cost carriers and foreign scheduled flights from landing at
Yogyakarta and Semarang, Central Java.

The announcement follows the scrapping by fledgling Indonesian
budget carrier AWAIR -- an affiliate of Malaysia's AirAsia -- of
a planned Singapore route after aviation officials there
complained about Jakarta's restrictions.

Singapore said it had refused access to AWAIR because of
Indonesia's new regulations but the airline accused the Civil
Aviation Authority of Singapore of using it as a bargaining chip
to protect its own low-cost carriers.

Hatta said AWAIR's failure to get landing rights in Singapore
was partly attributed to failure in talks on a bilateral air
service agreement with Singapore.

"Negotiations with Singapore on Jan. 26 suffered a deadlock.
We regret this and I'm not happy with this," he said.

The new regulations are likely to benefit Indonesia's own
budget operators and offer breathing space to beleaguered state-
run carriers Garuda Indonesia and Merpati, both badly in need of
a revamp to halt a decline in profits.

Indonesia has seen an increase in the number of low-cost
airlines in recent years as more of its scattered population take
to the air despite poor aviation safety records in the
archipelago nation.

Late last year, an MD-82 jet operated by Indonesian leading
budget carrier Lion Air skidded off the runway in the central
Java town of Surakarta, killing 26 people and injuring more than
100. The crash was blamed on bad weather.

The crash has not deterred the airline, which last year added
15 Boeings to its fleet and took out a lease on Jakarta's little-
used airport Halim Perdanakusuma airport to set up a hub for its
operations.

Meanwhile, ahead of the new restrictions, AirAsia said it
planned to double its once-daily flight from Kuala Lumpur to
Medan in a move its said would help raise its profile in
Indonesia and meet rising demand.

"The increase in the airline's flight frequency will better
introduce us to the people of Malaysia and Indonesia as a budget
airline company," AirAsia chief Tony Fernandes said while
launching the new service in Medan.