Getting the Undivided Attention of Indonesian Airlines
President Says Airlines Must Lower Sky-High Domestic Air Fare or He Will Invite Foreign Airlines to Fly Local Air Routes
Apparently fed up with the widespread destruction being heaped upon Indonesia’s tourism industry by recent sharp increases in air fares and the failure of Indonesia’s airline to keep their promise to reduce their ticket prices, President Joko Widodo has taken the unprecedented move of threatening to retaliate by allowing foreign airlines to start operating domestic routes.
In response, the Minister of Transportation Budi Karya Sumadi was quoted by Tempo.Co as saying on Friday, May 31, 2019: “Yes, the President’s idea is very good. We will seriously study the proposal. God willing, it can be implemented.”
Budi Karya views the current impasse with the national airline industry as an opportunity for Indonesia to open its air space to foreign carriers. The Minister of Transportation revealed that, under the current rules, in order for foreign airlines to operate in Indonesia the airline would need to register as an Indonesian company and seek 51% Indonesian ownership before operations commenced.
Budi Karya accepts the President’s reasoning that one way to lower prices is to increase the level of competition.