Saturday, 22 February 2020

Foreign Airlines are Only into Popular Tourist Stops: Observer



Petir Garda Bhwana

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  • TEMPO.CO, Jakarta - Airline industry observer Ziva Narendra presumes that foreign carriers are only interested in serving certain domestic routes and deems it understandable that they would only be interested in flying popular tourist destinations such as Bali.

    “Take an example of VietJetAir that made available a flight from Ho Chi Minh City to Denpasar. But is Balikpapan, Medan, and Makassar appealing to them?” said Ziva in the PasFM discussion held at Hotel Millennium in Central Jakarta yesterday.

    His statement is a response to the debate that arose following the government’s intention to let international airlines establish their business in Indonesia. The plan was initially stated by president Jokowi in an event.

    Read: Airline Cartel Probe; KPPU Find Indications of Ticket Price Fixing

    The President pitched the idea as a solution to the rising domestic airfares and bring competition to the domestic commercial airline industry in hopes to reduce airfares.

    According to Ziva, the main issue of this idea is not just about the flight routes they would serve but is more about financial capital burden and composition of shares.

    Indonesia’s flight industry is currently controlled by two giant corporations; Lion Group and Garuda Indonesia, which are generally blamed for creating a duopoly. He acknowledges that allowing foreign airlines to operate their business in Indonesia is, but not the only solution to create a healthier competition in the domestic commercial flight industry.