The days are numbered for many smaller airlines in Indonesia, with new regulations coming into force requiring them to operate at least ten vessels.
By January 12th 2012 all Indonesian airlines must operate at least ten aircraft, with a minimum of five to be owned by the airline company, while the remaining five may be rented. Failure to comply with the new regulation could see airlines having their operating certification withdrawn by the Ministry of Transport.
Edward A. Silooy, the Director of the Air Traffic section of the Department of Transportation, said the matter would not be postponed again, that January 12th 2012 was the final deadline for compliance.
The new law is to protect passengers [from small, financially unsound operators]. If they don’t operate ten vessels they will be shut down.
Companies that did not have sufficient capital to purchase at least five aircraft, and rent five others, could not be allowed to fly, he went on, in order to ensure safety standards.
He said the government did not want to see any more disasters and airline company failures, like that of Adam Air.
A further requirement of the law is that operators must present a five year financial and company plan to the ministry.
The airlines which currently do not meet the requirements are:
The following airlines already fulfill the requirements: Garuda Indonesia, Merpati Nusantara, Lion Air, Batavia Air, Wings Air, Sriwijaya Air, and charter operator Indonesia Air Transport.
The Secretary-General of the Indonesia National Air Carriers Association (INACA), Tengku Burhanuddin, complains that many of his members are unable to meet the 10 plane requirement because of a worldwide market shortage of viable aircraft, the situation made worse by limited ability to access credit from banks. Tengku said it was likely some airlines would have to merge to survive. (Bisnis Indonesia)
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