Seven new airlines set to take to the skies

Debbie A. Lubis, The Jakarta Post, Jakarta

Seven new airlines are set to enter the domestic airline market despite the already stiff competition in the industry, which has been weakened by years of economic hardship at home.

According to data from the Directorate General of Air Transportation at the Ministry of Transportation, the seven new airlines are Alatief Alair International, Asia Avia Megatama, Bali International Air Services, Nusantara International Services, Rusmindo Internusa, Indonesian Airlines Avi Patria and Satrio Mataram Airlines.

It is not yet clear, however, whether the new airlines will serve only domestic routes.

Top officials of the airlines could not be reached for comment.

"We are ready to operate scheduled commercial flights by May," Lyndon Tobing, an operational staff member at Bali Air told The Jakarta Post on Thursday.

He said the airline was considering five routes, but he declined to name them.

Separately, an official at Indonesian Airlines, Avi Patria, said the airline would fly the Jakarta-Surabaya route starting next month.

The entry of the new airlines, which will compete with 15 existing airlines, should benefit customers as prices are likely to go down.

But it will be a turbulent sky for the industry.

Although the government earlier issued a decree allowing airlines to raise prices by up to 20 percent, many airlines said they would rather cut their ticket prices to attract customers amid the tight competition.

There has already been one victim of the tough competition. Awair International, a relatively new player in the domestic airline industry, announced on Wednesday that it would temporarily suspend commercial flights starting March 8.

The airline, which has been serving the Jakarta-Denpasar, Jakarta-Surabaya and Jakarta-Medan routes, says it will resume operations in June, possibly with new routes.

Some are quite optimistic that the domestic airline market has started to recover. They cited the surprisingly 24.19 percent surge in the number of airline passengers on domestic flights to 7.67 million between January and September last year.

They also said that the new autonomy policy boded well for the airline industry as businesses and economic activities would develop in provinces and regencies outside of Jakarta.