Flight free­dom good for com­pe­ti­tion

OPEN SKY POL­ICY IS NEEDED TO SUP­PORT THE RE­GION’S COM­MIT­MENT TO ES­TAB­LISH THE ASEAN ECO­NOMIC COM­MU­NITY

The Jakarta Post - Magazine - - Contents - THE JAKARTA POST/JAKARTA

Even though the pro­to­cols of the ASEAN Open Sky Pol­icy have not been fully im­ple­mented in In­done­sia, the govern­ment has pre­pared var­i­ous sec­tors, in­clud­ing safety stan­dards and the coun­try’s avi­a­tion in­fra­struc­ture, to sup­port the sin­gle mar­ket in avi­a­tion.

The Trans­porta­tion Min­istry’s director gen­eral for air trans­porta­tion, Suprase­tyo, said the flight lib­er­al­iza­tion would re­sult in a more ef­fi­cient avi­a­tion in­dus­try, which would not only ben­e­fit air car­ri­ers but also pas­sen­gers.

“So these air­lines from var­i­ous coun­tries can just get in with­out any bar­rier. It’s good for com­pe­ti­tion be­cause the ser­vices will stag­nate with­out the com­pe­ti­tion,” he said re­cently.

The dis­cus­sion on the es­tab­lish­ment of the ASEAN Open Sky Pol­icy was ini­ti­ated when the heads of the 10 mem­ber coun­tries held a sum­mit in Bali in 2003, dur­ing which they signed the Bali Con­cord II dec­la­ra­tion.

The es­tab­lish­ment of the Open Sky Pol­icy is needed to sup­port the re­gion’s com­mit­ment to es­tab­lish the ASEAN Eco­nomic Com­mu­nity (AEC), which was in­au­gu­rated late last year. The free trade agree­ment, also called the ASEAN Sin­gle Mar­ket, will grad­u­ally al­low free flows of goods, ser­vices and peo­ple within the re­gion.

ASEAN coun­tries agreed to unite their skies into a sin­gle avi­a­tion mar­ket to boost the re­gion’s eco­nomic growth. It is also ex­pected to boost flight fre­quency in the re­gion, en­hance con­nec­tiv­ity be­tween the re­gion’s avi­a­tion mar­kets and en­cour­age higher ser­vice qual­ity, as well as cheaper ticket prices for pas­sen­gers.

The Open Sky Pol­icy is a rel­a­tively mod­est lib­er­al­iza­tion agree­ment, com­pared to, for ex­am­ple, those in the EU. ASEAN mem­bers agreed to grant only third, fourth and fifth free­doms among mem­ber states. The agree­ment is im­ple­mented through three mul­ti­lat­eral agree­ments: the ASEAN Mul­ti­lat­eral Agree­ment on Air Ser­vices (MAAS), the ASEAN Mul­ti­lat­eral Agree­ment on the Full Lib­er­al­iza­tion of Air Freight Ser­vices (MAFLAFS) and the ASEAN Mul­ti­lat­eral Agree­ment on the Full Lib­er­al­iza­tion of Pas­sen­ger Air Ser­vice (MAFLPAS).

The third free­dom is the right to carry pas­sen­gers or cargo from the home coun­try of the car­rier to a for­eign coun­try — for ex­am­ple, from Jakarta (home) to Sin­ga­pore (for­eign). The fourth free­dom is the right to carry pas­sen­gers or cargo from a for­eign coun­try to the home coun­try of the car­rier — for ex­am­ple, from Jakarta (for­eign) to Sin­ga­pore (home). Mean­while, the fifth free­dom is the right to put down in and to take off from the ter­ri­tory of the first coun­try, with the pas­sen­gers or cargo com­ing from or des­tined for an­other coun­try other than the home coun­try of the car­rier — for ex­am­ple, from Jakarta (home) to Sin­ga­pore (for­eign) and then to Kuala Lumpur (for­eign).

Sev­eral ASEAN mem­bers such as In­done­sia, the Philip­pines and Laos de­layed their rat­i­fi­ca­tion of the Open Sky Pol­icy amid fears that their air­lines, which are still rel­a­tively less com­pet­i­tive than those in Sin­ga­pore and Malaysia, would lose their mar­kets to their re­gional peers. In­done­sia only rat­i­fied the agree­ment early this year and is open­ing up five des­ig­nated ports in five cities, namely Jakarta; Denpasar, Bali; Surabaya, East Java; Medan, North Su­ma­tra; and Makas­sar, South Su­lawesi.

DBS Bank re­search cited that In­done­sia’s unique ge­og­ra­phy, grow­ing mid­dle-class pop­u­la­tion and ag­gres­sive ex­pan­sion plans by both home-grown and ASEAN car­ri­ers

meant that In­done­sia’s avi­a­tion mar­ket was poised to dom­i­nate the avi­a­tion space.

“With this, we ex­pect to im­prove the pro­fes­sional hu­man re­sources in the avi­a­tion in­dus­try, the air­lines, and we will also ex­tend the op­er­a­tional hours of the air­ports so we can boost the uti­liza­tion of the air­ports,” Suprase­tyo added.

Avi­a­tion in­fra­struc­ture re­mains one of the chal­lenges of the Open Sky Pol­icy for the archipelagic coun­try. The coun­try cur­rently has 235 air­ports, mostly op­er­ated by the min­istry, while the big ones are op­er­ated by state air­port op­er­a­tors PT Angkasa Pura I and PT Angkasa Pura II. The Trans­porta­tion Min­istry also aims to build 62 new air­ports over the next five years.

“Last year, we im­proved 100 new air­ports in the coun­try, from the north to Pa­pua,” the director gen­eral said.

Over­crowd­ing at In­done­sia’s ma­jor air­ports has im­peded the im­ple­men­ta­tion of the Open Sky Pol­icy. Soekarno-Hatta In­ter­na­tional Air­port in Ban­ten, widely cited as the only air­port that has cur­rently been able to fully im­ple­mented the pol­icy, was al­ready 246.8 per­cent over its 22-mil­lion­pas­sen­ger an­nual ca­pac­ity by serv­ing at least 54.2 mil­lion pas­sen­gers a year by 2015.

Cur­rently, Soekarno Hatta is also gear­ing up to have its new Ter­mi­nal 3 Ul­ti­mate start op­er­at­ing by May this year. It is ex­pected to fur­ther in­crease its ca­pac­ity.

The min­istry also claimed to have be­gun im­prov­ing the safety, se­cu­rity and ser­vices of the air­ports, in­clud­ing the on-time per­for­mance (OTP). Suprase­tyo said that the min­istry had re­duced the com­mer­cial ar­eas to give more space to the pub­lic, as well as re­vi­tal­ized the air­ports.

“We have watched over the on-time per­for­mance of the air­lines and we pub­lish the rank­ings al­most monthly. We have also set up reg­u­la­tions for man­ag­ing the de­lays,” he said.

In terms of safety and se­cu­rity, Suprase­tyo said the coun­try had also aimed to up­grade the avi­a­tion safety level based on the Uni­ver­sal Safety Over­sight Au­dit Pro­gram (USOAP) by the In­ter­na­tional Civil Avi­a­tion Or­ga­ni­za­tion (ICAO), which rose from 45.33 per­cent of 1,060 pro­to­col items to 70 per­cent this year.

The se­cu­rity level it­self has reached 93.6 per­cent, he said. The ICAO is slated to con­duct the off­site au­dit in April.

Mean­while, the coun­try has also aimed to up­grade the safety sta­tus given it by US Fed­eral Avi­a­tion Ad­min­is­tra­tion (FAA) by this year, from Cat­e­gory 2 to Cat­e­gory 1. The govern­ment claims to have ful­filled 97.5 per­cent of the items in the au­dit, with seven items re­main­ing.

“We will equip the air­lines with these reg­u­la­tions,” he said, adding that the min­istry had also is­sued at least 100 reg­u­la­tions last year in its bid to im­prove the sec­tor.

The govern­ment also scrapped the im­port duty for air­craft parts and main­te­nance as part of the eco­nomic stim­u­lus pack­age last year, aimed to re­duce the op­er­a­tional costs of the air­lines.

“Our air­lines are big enough now. I think it’s the other coun­tries that are still wor­ried about us,” he said.

How­ever, Suprase­tyo said the govern­ment would not pro­tect the lo­cal air­lines and would let them com­pete healthily with the other air­lines in the re­gion.

An­tara

New routes: An Air­bus 230 air­craft owned by Garuda In­done­sia’s sub­sidiary Ci­tilink de­parts from Hu­sein Sas­trane­gara Air­port in Ban­dung on its way to Lombok, West Nusa Teng­gara. The air­line plans to open three new routes this year con­nect­ing Jakarta-MedanBanda Aceh, Medan-Pekan­baru and Pekan­baru-Ban­dung.

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