Airline News
Indonesian carriers demand better operating environment
September 25th 2015
Indonesia’s aviation industry is increasingly unhappy about the country’s fuel supply monopoly, claiming airlines and airports are charged up to 20% more than their regional competitors, as nearly all aviation fuel supply contracts are held by state-owned oil and natural gas corporation, Pertamina. Read More »
Led by transportation minister, Ignasius Jonan, carriers including Indonesia AirAsia and Garuda Indonesia’s low-cost subsidiary Citilink, are lobbying for an urgent revision of the practice which local airlines claim is hurting business. The Indonesian National Air Carriers Association recently met with government trade ministers to discuss the situation and is pushing for a rapid response. “Indonesian airlines have no other choices but to “squeeze” Pertamina, which holds the monopoly on jet fuel distribution,” Indonesia Air Asia board commissioner Dharmadi said. “That is not healthy.”
Citilink commercial director, Hans Nugroho, also spoke out against the status quo and said the Indonesian government should allow private oil supplies to provide alternative refuelling options at Indonesian airports. “This should not be a monopoly. We need [the option] to buy elsewhere and would be happy to pay less,” he said. Nugroho said given that fuel could be up to 50% of operating costs, any reduction or alternative would be “very helpful”.
Indonesia has stepped up efforts recently to make the playing field for its carriers more level. Minister Jonan has signed a regulation on delay management standards that will apply to all airlines operating in the archipelago. Suprasetyo, director-general of air transportation at the ministry, added the new regulation sets out a supervisory presence of responsible stakeholders in each instance of flight delay, empowering the ministry to audit airlines' standard operating procedures (SOPs) related to crisis management to prevent a repeat of prolonged delays that passengers aboard low-cost carrier Lion Air had to endure in February. "I have ordered inspectors who verified Lion Air's crisis management SOP to extend their probe to all airlines," Suprasetyo added.
In early September, Indonesia abandoned a punitive policy that had forced low-cost carriers (LCCs) to charge higher prices. The rollback, which will become effective on September 28, permits LCCs to sell tickets for as low as 30% of the maximum fare of full service carriers, rather than the present 40%.
