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Govt threatens to shut down default-prone airlines
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A group of pilgrims from Surabaya and Magetan in East Java board a Saudi Arabian Airlines plane to Madinah in Saudi Arabia at Juanda International Airport in Surabaya. The Transportation Ministry has set a deadline for airlines with negative equity to inject capital or merge with healthy airlines. Otherwise, their operating permit will be revoked. ( JP/ Wahyoe Boedhiwardhana)
T
he Transportation Ministry has given airlines with assets valuing less than their outstanding loans a September deadline to receive capital injections or merge with healthy airlines. Noncompliance could see their operating permits revoked.
According to the Ministry’s data, there were only three aviation companies with negative equity: Indonesia AirAsia (owned by AirAsia Malaysia), ASI Pudjiastuti Aviation (owned by Maritime Affairs and Fisheries Minister Susi Pudjiastuti), and Asia Link Cargo (owned by a Malaysian company).
If they failed to achieve positive equity in August, their license would be frozen. If the situation remained unchanged in September, the license would be revoked, said the Transportation Ministry's air transportation general director Suprasetyo.
"We are monitoring them and have suggested solutions, including merger. We have received a letter from Indonesia AirAsia stating that they would merge with Indonesia AirAsia X," he said in Jakarta on Tuesday.
Indonesia AirAsia has suffered losses in the last two years. In a letter to the ministry, the airline stated that the surviving company would be Indonesia AirAsia X. "We received the letter last week. Our concern is this merger must not disturb the operations," he said.
The ministry last year obliged all airlines to submit their audited financial statements. In 2015, 13 airlines reported negative equity, including Indonesia AirAsia, Batik Air, Cardig Air, Asialink Cargo Airlines, Trans Wisata Prima Aviation, Eastindo Services, Air Pasifik Utama, Jhonlin Air Transport, Ersa Eastern Aviation and Tri MG Intra Asia.
This year, 45 of 61 airlines operating in Indonesia have submitted their financial statements. Of those that have not yet submitted their statements, 11 airlines asked for extra time to audit their reports, while the other five have provided no reasons for not yet submitting the documents.
"Aviation is a high profile business, with rather low profit margins. If you want a low profile business with an extremely high profit margin, selling cellphone credit might be a better choice for you," Suprasetyo said. (ags)
