National airline Garuda Indonesia has estimated its international traffic will be down by 15 percent in the period between mid-November and the year's end due to the volcanic eruption on the holiday island of Bali.(Antara Photo/Widodo S. Jusuf)

Asean Open Skies Set to Go Ahead Despite Year of Disasters in 2014

BY :ERWIDA MAULIA

JANUARY 06, 2015

Jakarta. The recent crash of Indonesia AirAsia Flight QZ8501 in the Java Sea will not deter Indonesia's aviation industry from embracing the opportunities offered by the Asean Open Skies policy, a scheme to liberalize the regional aviation market that came into effect on Jan. 1.

Under the new policy, Southeast Asia's skies will be transformed into a single aviation market, part of the Association of Southeast Asian Nations' (Asean) Economic Community commitments that have been agreed upon by heads of the 10 members states of bloc.

Asean Open Skies, set to be fully effective by the end of the year, is expected to boost connectivity and people's movements in the region, and in turn spur regional economic growth.

Three major tragedies afflicting Southeast Asia's aviation sector last year — the loss of two Malaysia Airlines flights and the AirAsia tragedy — have raised questions as about whether Asean will remain on track for its Open Skies plan.

On Sunday, Indonesian Transportation Ministry spokesman J.A. Bharata said the policy was still on course.

"We're currently revamping our airlines, evaluating their compliance with existing regulations to further improve passengers' safety," Bharata said, adding that the moves were conducted to support Indonesia's implementation of the policy.

The renewed scrutiny comes in the wake of the crash of Flight QZ8501, which went missing shortly after departing from Juanda International Airport in Surabaya on Dec. 28, en route to Singapore with 162 people on board.

The Transportation Ministry has since declared that the carrier did not have permission to fly that route on a Sunday, although Singapore officials say it was cleared at that end for the flight.

Indonesian officials did not say why Flight QZ8501, a regularly scheduled flight, was allowed to operate without permission. Indonesia's acting director general for air transportation, Djoko Murjatmodjo, said last week that all airlines operating in the country would be evaluated for any route violations.

Arif Wibowo, the chairman of the Indonesia National Air Carriers Association (INACA), said on Monday that the AirAsia crash and subsequent scrutiny of airlines' compliance with safety regulations would not deter the local aviation industry from taking up the opportunities offered by the Open Skies policy.

"Asean Open Skies is a political will of the government. We'll face it head-on; we're used to free competition after all," said Arif, also the newly appointed chief executive officer of national flag carrier Garuda Indonesia.

He added some local airlines, including Garuda's low-cost unit, Citilink, had been applying or preparing to apply for permits to operate more flights bound for other Southeast Asian countries.

"They're conducting procedures for that; some of them have applied for flight permits," Arif told the Jakarta Globe.

He added the local industry's major concern surrounding the implementation of Asean Open Skies remained competitiveness issues.

"Are local airlines competing on a level playing field [with other airlines in the region]?" Arif said, echoing the concern expressed by executives of several Indonesian airlines just last month.

They said they were not ready to face Asean Open Skies, citing tax policies, airport inefficiencies and high aviation fuel costs in Indonesia that make local airlines less competitive than their Southeast Asian counterparts — especially those from Singapore, Malaysia and Thailand.

Aviation expert Arista Atmadjati of Yogyakarta's Gadjah Mada University said on Monday that local airlines would have to brace for the new policy because it was part of the government's commitment to supporting Asean integration under the Asean Economic Community scheme.

The liberalized market will boost flight frequency in the region, but this should not be a source of concern, Arista said.

He cited as an example the busy route near Indonesia's Belitung Island, where Flight QZ8501 had its last contact with air traffic control.

When the incident occurred, six other planes were flying in the area, and two others were approaching; but even so, the high-traffic air space was not yet overcapacity, according to Indonesia's state navigation operator, AirNav.

"According to the head of AirNav [...] that air space can accommodate up to 14 flights," said Arista, also a marketing analyst with Garuda.

The Transportation Ministry said in September that five cities — Jakarta, Medan, Surabaya, Denpasar and Makassar — were ready to fully open their skies in 2015 to embrace the new Asean policy.

Hemi Pramuraharjo, a spokesman with the ministry's Directorate General of Aviation, said last month that the government planned to open more takeoff and landing slots to foreign airlines at airports in those five cities.

He noted that currently 72 percent of flight slots in the country's main gateway, Soekarno-Hatta International Airport outside Jakarta, were filled by domestic flights.

"The ideal figure should be 35 percent domestic, 65 percent," Hemi said.

"We will be pushing for that, not just for Soekarno-Hatta, but for all five airports that will be opened up during the Open Skies policy," he added. "We want to have a balanced proportion. If foreign airlines can't enter Indonesia, then the impact will be that our airlines can't go to their countries. It's an issue of reciprocity."

Arista said giving more slots to foreign airlines from around the region should not be a problem as long as the requests were properly examined before being approved by the Transportation Ministry.

"Although they all compete to enter Indonesia, given the size of Indonesia's aviation market, which is the largest in the region, the granting of slots should be limited," he said.

"It should be managed and approved by the air transport directorate general, taking into account the capacity of the airports in question and so on."

The capacity of the five airports will determine whether the implementation of the Open Skies policy can run smoothly, especially because extra slots — according to the ministry's plans — will mainly be given outside airports' regular operating hours.

"Do those airports have enough human resources for extended operating hours? Do they have enough supporting facilities?" Arista said.

He added, though, that he was confident that by July or August, the five airports would be ready to fully accommodate Asean Open Skies, citing ongoing expansions of some of the airports that are expected to complete by that time.

Further Coverage

Editorial: Airlines Must Adapt to Liberalization

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