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New Indonesian Aviation Law Ratified

Indonesian Moves to Bring Order and Safety to it Aviation Sector.


Bali News: New Indonesian Aviation Law Ratified
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(12/20/2008)

The long-discussed aviation law has now been ratified by the House of Representatives (DPR) on December 17, 2008, and is expected to place greater emphasis on airline security and safety. Among the highlights of the new law are:

● The private sector will be given the opportunity to operate airports in Indonesia, ending a monopoly held by state-owned PT Angkasa Pura I and PT Angkasa Pura II.

● Airline operators are now required to own a minimum of 5 aircraft and rent as least 5 more in order to create armadas deemed by the government to be sufficient to support an adequate management and maintenance regime. This change in the rules is expected to fuel mergers and acquisition as small operators struggle to stay in business and meet minimum fleet requirements.

● Airlines must demonstrate financial soundness with sufficient assets to finance flight safety.

● A three-year grace period during which airlines will be given the opportunity to bring their operations into compliance with the new operating rules.

● Air traffic control and navigation support will become the direct responsibility of the government and no longer be operated by airport authorities.

● In a controversial move, the government now has the right to set minimum selling rates for economy class fares.

● Special attention must be paid by Indonesian operators for aged and disabled passengers.

● Airlines must provide compensation for passengers on delayed or cancelled flights.

● In addition to a requirement to hold a valid air operating certificate, Indonesian airlines are also required to maintain minimum levels of spare parts.

● Air accidents will now be investigated by an independent body.

At the present time, Indonesia has a total of 14 airlines operating 964 aircraft over 167 different routes. The Jakarta Post reports that some 30 more airlines are in the process of seeking operating licenses, a number expected to decline in the face of requirements levied under the new aviation law.

The passage of the new aviation law, now being translated into English, was widely seen as a critical step in efforts to lift the current European Union "blacklisting" of all Indonesian registered aircraft.


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