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Policy-making in aviation needs to involve industry players

Indonesia’s intention of becoming a member of the UN International Civil Aviation Organization (ICAO) council may backfire if the government implements regulations without considering their impacts on flight-industry players

Prima Wirayani (The Jakarta Post)
Jakarta
Fri, November 20, 2015

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Policy-making in aviation needs to involve industry players

I

ndonesia'€™s intention of becoming a member of the UN International Civil Aviation Organization (ICAO) council may backfire if the government implements regulations without considering their impacts on flight-industry players.

Air Law Community chairman Andre Rahadian said in a discussion on Thursday that several regulations imposed by the government aimed to improve flight safety and security had burdened airlines.

'€œRegulations should consider the airlines, especially in terms of their businesses continuity,'€ he said, adding that some regulations had prevented airlines from making achievements while already being affected by the slowing global economy.

Andre highlighted several regulations that weighed in airlines'€™ costs, such as a minimum paid-up capital requirement and minimum fleet age.

He expressed concern that a regulation obligating airlines to deposit paid-up capital of Rp 500 billion (US$36.57 million) in the form of fresh funds and/or capital goods would only increase costs. He said only two airlines in the country owned such capitalization, leaving others to struggle to meet the requirement in three-years time.

The Transportation Ministry introduced earlier this year the minimum capital regulation in response to a major plane accident. The ministry was of the opinion that the accident occurred on account of improper maintenance as a result of the airline'€™s insufficient capitalization.

Andre said that by involving industry players in the regulation-making process, the government would be able to measure the possible impact of the proposed regulation.

'€œThis can also ensure legal certainty as chances to revise the regulation will be smaller,'€ he said.

The government aims to become a ICAO council member for the 2016-2019 period to introduce Indonesian interests in the organization'€™s policies. To support the objective, the government must improve flight safety to meet the ICAO requirements.

The move is in line with the ministry'€™s commitment to focus on transportation safety next year, as it plans to allocate 20 percent of its Rp 48.5 trillion ($3.57 billion) budget in the 2016 state budget to improve safety in air, land, sea and rail transportation.

Coordinating Maritime Affairs Minister Rizal Ramli said on Thursday that the government had asked the Australian government to support Indonesia in its efforts to become a council member.

'€œI assisted in talks with the Australian government to convince Australia and other countries support us,'€ he said as quoted by kompas.com.

The ministry claimed earlier this month that it had implemented corrective recommendations from the ICAO and the US Federal Aviation Administration (FAA) in its efforts to become a council member.

The ministry'€™s director for air transportation, Muzaffar Ismail, said the corrective actions, which were in line with recommendations from the ICAO, were 96.2 percent complete.

The ICAO officials will carry out an evaluation and conduct an inspection this year to follow up and validate the adjustments.

Rizal stated that the large size of Indonesia'€™s airline business encouraged such an effort.

Data from the ministry said that the country'€™s airlines had flown around 87 million passengers last year. It aims to fly around 162 million people by 2019.

To support the growth, the ministry plans to build 62 new airports by 2030, adding to the existing 237.

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