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Omnibus bill makes it easier to start an airline
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The prototype N250 Gatotkaca aircraft, produced under the supervision of then-PT Industri Pesawat Terbang Nusantara president director BJ Habibie, is parked at PT Dirgantara Indonesia's hangar on Sept. 12, 2019. JP/Arya Dipa
(JP/Arya Dipa)
T
he omnibus bill on job creation currently being deliberated at the House of Representatives (DPR) proposes some changes to requirements and licensing procedures that will make it easier for investors to enter the aviation business.
The bill, if approved in its current form, will amend a number of articles in Law No. 1 of 2009 on aviation, which stipulates requirement and procedures for obtaining licenses to set up an airline company. In total, the bill amends 74 articles and removes 19 others in the Aviation Law.
Transportation Minister Budi Karya Sumadi said in Jakarta on Friday that the omnibus bill, for example, eases the requirement for the minimum number of aircraft an airline should own and operate to ensure that more investors would enter the business, thereby creating a more competitive aviation market.
“In the aviation industry, we cut the number [of required aircraft] and lowered the capital requirement,” said Budi Karya.
Article 118 of the Aviation Law sets the minimum number of aircraft an airline company must own and operate. A scheduled commercial airline, for example, should operate at least five aircraft of its own and another five leased from another party, while an operator of a nonscheduled commercial airline or cargo airline must own at least one aircraft and lease at least two more from other parties to support its business.
“Basically, in the new policy, we will improve the ease of doing business. [..] So, it will create competition, if there is competition, services will get better,” said the minister.
Under the omnibus bill, most of the requirements for setting up aviation companies will be stipulated in government regulations signed by the president. At present, they are mostly set out in ministerial regulations.
