Charter air carriers fly in bad weather
THE DECLINE IN MINING, OIL AND GAS EXPLORATION ACTIVITIES CAUSED BY THE FALL IN COMMODITY AND OIL PRICES HAS SEVERELY HURT AIR CHARTER BUSINESS
Indonesia’s charter air carriers still pin high hopes that the industry will see a silver lining after the turbulence it has faced in recent years caused by the decline in the country’s mining, oil and gas exploration and production activities.
Indonesia National Air Carriers Association (INACA) chairman of non-scheduled flights Denon Prawiraatmadja said the decline in the mining, oil and gas sectors severely hurt the air charter business in the country.
“A drop in oil prices has caused many oil and gas companies to cut their budgets for helicopter rentals since last year,” he said over the phone recently. The fall in commodity prices has led to a fall in orders from mining companies. At present, the chartered airlines’ customers come from mining, oil and gas companies.
“Business this year will probably not be as good as in 2013,” he said, referring to the year when Indonesia, which has Southeast Asia’s largest economy, benefited from a commodity boom.
Amid the challenging business environment, Denon, who is also the president director of air charter operator Whitesky Aviation, noted that since 2014 several air charter companies started to diversify into tourism and city transportation, for example, to get around the low-demand situation.
“Charter flight services for general purposes still provide a big opportunity in Indonesia,” he said, adding that the general purposes include tourism transportation and luxury flight services.
Whitesky announced recently that it would spend US$36 million to purchase 30 helicopters in preparation for next year’s launch of its new point-to-point air-ride service dubbed the Helicity Service.
The Helicity Service allows up to three customers to travel from one point to another in Greater Jakarta and the West Java capital of Bandung.
The price tag will be about Rp 3.5 million (US$266) per trip for each passenger, or about Rp 10 million per trip, lower than the standard fare of around Rp 30 million per hour. A chopper trip between Jakarta and Bandung normally takes about 40 minutes. It is hoped the lower price will encourage more people to use the helicopter service.
The company aim at tapping market potential from non-corporate passengers amid the slowing demand for air charter services from oil, gas and mining corporations caused by a slump in oil prices.
In addition to the general utility, Indonesia’s market still provide room to explore using helicopters for ambulance services and tourism. Denon said currently air charters for tourism purposes were available in Semarang of Central Java, Bali and Sorong of West Papua only.
Data from the Transportation Ministry shows that as many as 43 commercial nonscheduled and two non-scheduled cargo airlines operated in Indonesia last year; 16 of
them are registered as INACA members. The number of commercial non-scheduled airlines was down from the 47 that flew in 2014.
Meanwhile, there were 253 chartered planes, excluding helicopters, flying last year. Of that number, 64 were operated for commercial purposes while the remainder were for non-commercial and private use.
Among the charter airlines is ASI Pudjiastuti Aviation, known as Susi Air, which was established in 2004 by Susi Pudjiastuti, who is now the maritime affairs and fisheries minister. The firm operated a fleet of 50 aircraft to serve 196 domestic routes to 164 destinations, mostly in remote areas. It recorded between 150 and 225 flights per day last year.
Susi Air provides several services, such as chartered flights, survey flights, surf charters, freight services and even a flying school.
Denon stated that in order to boost the growth of the industry, the association had proposed several measures to the government, including allowing helicopters to fly in the evening and providing more airports for non-scheduled flights.
“Providing pilots and engineers, I think, has to be government priority for now,” said Denon, adding that the industry lacked human resources because of high education costs.
“The government should encourage businesspeople to establish more flying schools,” he said.
Denon acknowledged that the current regulations were supportive of the industry, giving as examples the zero import duty on spare parts for aircraft and the proactive moves of state-owned oil and gas company Pertamina to provide aviation fuel to charter airline companies.
In the last two years, the government has also facilitated discussions among business players, relevant ministries and state-owned enterprises to improve the chartered flight industry, Denon claimed.
“We understand that the government’s priority is for commercial scheduled airlines as their share is around 90 percent of the market. However, that’s not a reason to not take care of us,” he said.
Standby: Two Cessna 208B commuter planes operated by Susi Air at Long Ampung Airport in Kayan Selatan district in Malinau regency, East Kalimantan.