The Jakarta Post
The ASEAN open-skies policy in 2015 will allow Southeast Asian airlines to fly to all airports across the region as often as they want without being restricted by government-to-government agreements. Ahead of the implementation of this policy, Malaysian-based low-cost carrier AirAsia is moving ahead to secure the Indonesian market, which accounts for almost half the region's total population. During a recent visit to Jakarta, AirAsia Group CEO Tony Fernandes spoke with The Jakarta Post's Nadya Natahadibrata about his plans to grow the Indonesian business. Below is an excerpt from the interview.
Question: Can you explain a little about AirAsia's plan to enhance Indonesia's domestic connectivity?
Answer: I've lived in Jakarta and have seen a lot more by living here, and I understand that there's so much more to Indonesia than just Bali and Jakarta.
I'm really keen that we try to bring people, starting from ASEAN to the world, to Indonesia, to see places like Ambon, Lombok, Padang, Makassar and Balikpapan.
There are so many places to see in Indonesia and I think that's the benefit of ASEAN having open skies. We can create a single market.
Bandung is a great example. We brought a lot of Malaysians, Singaporeans and Thais to Indonesia, to Bandung, and then the market really grew. We can do that in many more places. Indonesia is not just about Bali.
You opened a regional hub in Jakarta two years ago. How's much has the hub contributed so far to the group?
About 25 percent of the group's business comes from Indonesia. It should be a lot more. So, really the main aim of opening the ASEAN office here in Jakarta was to drive the ASEAN secretariat to move faster with its reforms and, second, to understand the Indonesian market.
I [initially] only knew Jakarta and Bali. Now I know a lot more places; that's why for 2015, my tagline is 'Indonesia is more than Bali'. And I want to create an Indonesian pass, so that foreigners can travel around the country in one month for one price to see all the places in Indonesia that we fly to.
So, we're going to open more routes. Indonesia is actually [like] a continent; it's a big place. From Medan to Papua, it's almost like flying from Kuala Lumpur to India. That's my big goal.
Are you also planning to open more routes to the country's east, especially as connectivity to the region can be improved?
Yes. We are very keen to open new routes to the eastern region, as well as in Kalimantan and Sumatra. But I need help.
I need airports to be more cooperative. Isn't it better if they [airport operators] charge me 80 percent less [on airport taxes that might be charged on airlines rather than on passengers]? It is still better [for airport operators] to get the [remaining] 20 percent and have a market rather than not having a market at all.
And I need Pertamina and other to reduce the costs [on aviation turbine fuel or avtur] to make avtur cheaper.
Are there any particular new routes in Indonesia that you hope to launch sometime soon?
I love Lombok. I think Lombok has great potential. I also love Ambon. I think it has a lot of beautiful islands there, as well as Labuan Bajo. These are beautiful places and no one has ever heard of them. AirAsia can help and obviously also create jobs in these places.
Indonesia's aviation industry is currently having a hard time. What is AirAsia's strategy to overcome that?
We have to work together ' the INACA [Indonesia National Air Carriers Association], Garuda [Indonesia] and the Lion Group are working together to ask that the aviation industry be looked at and restructured.
Airport taxes are too high. For me, airports can't keep charging whatever they want. Who is controlling them? And, ultimately, who pays? The people. As it gets more and more expensive, fewer people will fly. When I [first] came to Indonesia, there were 20 airlines. Now there are only three or four. So, it's a serious time for the airline industry.
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