Indonesia’s aviation sector needs govt aid to fly high again

Indonesia’s aviation industry, hit hard by the Covid-19 pandemic, will need government incentives to recover, said Indonesia National Air Carriers Association (Inaca) chairman Denon Prawiraatmadja.

The industry contributed more than 2.6 per cent to the gross domestic product and had provided employment to 4.2 million people, he was quoted in an Antara News report.

“For the aviation sector to recover, we need tax incentives and (help with) airport fees,” Denon said.

Thirty-six companies under Inaca had submitted a proposal seeking incentives to the Coordinating Ministry for Economic Affairs in March last year, but the ministry had yet to approve them.

The airlines would also need to offer payment flexibility to aviation-related state enterprises, such as Pertamina, airport operator Angkasa Pura I and II, and air navigation firm AirNav, Denon added.

AirAsia Indonesia chief executive officer Veranita Yosephine said negotiations with the airport operator on payment delays or discounts for inactive planes parked at the airport were underway.

“We continue to work in coordination with the authority, association and stakeholders in the aviation industry to survive and recover from the impact of the pandemic.”

PT Citilink Indonesia president director Juliandra Nurtjahjo believed that demand in the aviation industry was expected to recover in 2022, if the government’s vaccination programme met the target.

“The most optimistic prediction is that by the end of 2023 or early 2024, (the demand) will recover to its previous level (seen) in 2019.”