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Govt suspends market for new airlines
The government has decided to halt the issuance of new flight permits for any new players that want to tap into the growing domestic aviation industry due to the countryâs insufficient air transportation infrastructure
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he government has decided to halt the issuance of new flight permits for any new players that want to tap into the growing domestic aviation industry due to the country's insufficient air transportation infrastructure.
The Transportation Ministry's air transportation director general, Herry Bakti S. Gumay, said the ministry was currently preparing a new policy that was expected to be finalized, along with a timeframe for implementation, within this quarter.
'We have to [temporarily] stop providing opportunities for all new airlines that want to start operating in the next few years because we don't have enough infrastructure to accommodate their expansions. We need to wait for a couple of years before reopening the market,' Herry said on Friday.
He refused to name the investors who have had to delay their plans to establish new airlines because of the infrastructure bottlenecks.
He said NAM Air, Jatayu Air and Indonesia AirAsia X were the last carriers to be given flight permits ahead of the issuance of the new policy, which will only affect scheduled commercial airlines.
Currently, there are 18 commercial airlines operating in Indonesia, serving more than 300 routes.
According to the ministry's recent data, the number of air travelers across the archipelago reached 77.4 million during 2012, up from 68.3 million in 2011 and 58 million in 2010.
But Indonesia's 29 commercial airports can only handle 40 million passengers annually.
Among them are five international airports prepared for the ASEAN Open Sky 2015, namely Soekarno-Hatta International Airport to the west of Jakarta; Kuala Namu International Airport in North Sumatra; Juanda International Airport in East Java; Ngurah Rai International Airport in Bali and Sultan Hasanuddin International Airport in South Sulawesi.
Both state-owned airport operators Angkasa Pura I and Angkasa Pura II have been working on expansion projects for the past three years, including the US$678 million upgrade of Soekarno-Hatta airport.
This project, which began in mid-2012, is expected to be completed by the end of 2014.
Apart from insufficient infrastructure, the country's aviation industry was also experiencing a shortage of human resources, ministry spokesman Bambang S. Ervan said.
For example, Indonesia needs 1,000 new pilots every year, but it can only produce half that number.
'Neither do we have enough inspectors to manage this sector properly. We need to halt the establishment of new airlines because overcapacity could have a dangerous impact on safety, which is the most essential element in the
industry,' Bambang said.
Indonesian National Air Carriers Association (INACA) secretary-general Tengku Burhanuddin said the ministry's decision was a wise one.
'I don't think that this regulation will slow down growth in our aviation sector because every player is expanding their services,' he said.
