T

hirteen airlines are in a race against time to turn their negative equity positive by the end of this month to avoid having their operating permits suspended by the Transportation Ministry.

The ministry discovered that the airlines had negative equity after reviewing the financial reports of 60 domestic carriers.

All of the 13 airlines, including budget carrier Indonesia AirAsia, Lion Group'€™s full service airline Batik Air and cargo airline Cardig Air, will be given until July 31 to move their balance sheets into positive figures.

The remaining 10 airlines are Trans Wisata Prima Aviation, Istindo Services, Survei Udara Penas, Air Pasifik Utama, John Lin Air Transport, Asialink Cargo Airline, Ersa Eastern Aviation, Tri MG Intra, Nusantara Buana and Manunggal Air.

Negative equity occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan.

Indonesia AirAsia corporate secretary Audrey Progastama Petriny told The Jakarta Post on Thursday that his carrier, which is an associate carrier of Malaysian budget airline AirAsia, would comply with the ministry'€™s regulation and was in the process of restructuring its financial situation.

Meanwhile, Cardig Air CEO Boyke P. Soebroto said that his company was fully aware of the regulation and would soon hold a shareholder meeting to discuss the issue.

'€œWe support the government'€™s decision and realize that this requirement is important for maintaining a healthy aviation business. We do wonder however why we have not been asked to do this before, even though the law was issued in 2009,'€ Boyke told the Post.

Batik Air meanwhile was unable to be contacted for comment.

According to Transportation Minister Ignasius Jonan, it is important for all airlines to maintain positive equity, as it affects an airline'€™s financial ability to maintain safety standards.

'€œ[The policy is] in accordance with Law No.1/2009 on aviation, seeking to improve adherence to world safety standards,'€ Jonan told reporters.

Following the crash of AirAsia flight 8501, which killed all 162 people on board in December last year, the minister has enforced several new regulations aimed at increasing control of the country'€™s aviation standards.

In February, the ministry issued Ministerial Regulation No. 18/2015, which obliged all airlines to submit audited annual financial statements by April 30, to assist with monitoring the airlines'€™ financial conditions and ensuring that they operated in accordance with the ministry'€™s safety and security standards.

The ministry also issued Regulation No. 45/2015, which regulates minimum paid-up capital for transportation companies. Under the regulation, scheduled airlines operating planes with a capacity of 70 seats or more are required to have a paid-up capital of Rp 500 billion (US$37.5 million). Those with aircraft of 30 seats or less must have a paid-up capital of Rp 300 billion and those operating cargo planes must have Rp 100 billion.

Last week, the European Union maintained a ban on all but four Indonesian airlines from entering Europe, a move caused by a lack of improvement in domestic aviation safety.

The European Commission, the regulatory arm of the EU, said in a release last Thursday it had updated its Air Safety List, including all Indonesian airlines except flag carrier Garuda Indonesia, Airfast Indonesia, Ekspres Transportasi Antarbenua (Premiair) and Indonesia AirAsia.

The EU Air Safety List is a list of airlines that are subject to an operating ban or operational restrictions within the EU.