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Government does not recognize “Low Cost Carriers”, says Transport Minister


Thursday December 14, 2006

From Nusa Dua, Bali, Antara reports that Transportation Minister, Hatta Rajasa recently  confirmed that up to this moment, the Indonesian government has not recognized per se the concept of Low Cost Carriers, and will accordingly, not issue specific regulations pertaining to LCC’s and its existence. Rajasa made this statement to the press after opening a meeting of Air Communications Director Generals in the Asia-Pacific in Bali . 

Earlier in the 50th meeting of the AAPA in Osaka in Japan, it was mentioned that LCC’s have grown very rapidly in the Asia Pacific region acquiring some 9% market share , although this trend is surmised to have contributed towards an increase in airline accidents in this region. 

AAPA counts 17 major airlines in the Asia-Pacific as its members, including Garuda Indonesia. Minister Hatta Rajasa concedes that the trend of LCC’s is indeed increasing in the world, including in Indonesia, however, in this respect, the government can only tolerate airlines to operating on reduced airfares for the sake of economy and efficiency, without compromising the airline’s safety, for example in catering and services. 

LCC’s must also be supported by an efficient airline industry and this should not be done by jeopardizing safety. In other words, there can be no linkage between LCC’s and airline safety. 

As to the conjecture that the incidence of aircraft accidents in Indonesia is due to reduced safety measures by airlines, Hatta Rajasa rejects this conclusion. The phenomenal 22% growth in the number of air passengers should be supported by adequate infrastructure such as airport facilities etc. Comparing growth of this industry to airline accidents, the ratio is declining, said Minister Rajasa.     

Meanwhile, according to Antara, ICAO Asia Pacific ICAO Director, Lalit B. Shah confirmed that there is indeed not yet a particular term for the LCC phenomenon. 

"Most important indeed is that these airlines apply safety standards similar to all other airlines”, said Shah. 

Director General for Air Transport, M. Iksan Tatang, in the meantime said that in Indonesia, the government understands that there is the practice of low fare among carriers. However, our airports are also not specially equipped to their needs. 

When flying to Singapore, for example, Indonesia’s so-called LCC’s also do not want to  berth at the LCC terminal of Changi airport, which is now only used by ’s own Tiger Airways, said Tatang. 

Last month, on 12 November, balidiscovery.com reported that
Indonesia's President Susilo Bambang Yudhoyono issued instructions to the Minister of Transportation, Hatta Radjasa, to impose stiff sanctions and punishments on any national airline found to be ignoring safety procedures in the rush to sell cheap tickets.

Quoted in the Indonesian language Bisnis Bali, the President said, "I have asked the Department of Transportation to impose penalties on airline companies found to be breaking the rules." The President said that the desire to sell "cheap tickets" is no excuse for any Indonesian airline to scrimp on issues of passenger safety.

Give Garuda and Merpati a Hand?

When making his pronouncement on air safety standards, the President also gave verbal instructions to the Minister for State-Owned Enterprises, Sugiharto, to help state-owned airlines rebuild and restructure. While not specifically naming the airlines he wished helped, the President's comments are widely accepted to have been directed at assisting debt-ridden Garuda Indonesia and Merpati Nusantara, reports balidiscovery.com.