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Indonesia Says 'No' to Open Skies with Singapore

Minister of Transportation Hatta Says Indonesian Carriers Unable to Withstand the Competition.

(5/18/2005) Indonesia's Minister of Transportation, M. Hatta Radjasa, was quoted in the May 17, 2005 edition of the Indonesian-language Bisnis Indonesia as saying that Indonesia is not prepared to establish "open skies" between Singapore and Indonesia as proposed for implementation by Singapore for 2006-2007.

The delaying in the introduction of any "open skies policy," allowing free and unlimited mutual access to the airlines of both countries, is necessary, according to the Transportation Minister, in order to allow Indonesia's domestic carriers the opportunity to consolidate their businesses in order that they will be able to compete with foreign carriers.

The Minister said the not-for-now "open skies" position would be his position during technical talks on air access issues between Indonesia and Singapore set for late May. Hatta explained that, in his opinion, an "open skies" policy would cause the collapse of a number of Indonesian carriers, resulting in substantial financial losses to the Country.

Fear of Low Cost Carriers

Claiming he was only interested in win-win solutions on issues relating to air access policies, Hatta indicated that his chief concern was that low-cost carriers would destroy the marketplace. He said he may be prepared to consider liberalizing bi-lateral air agreements if a prohibition against low-cost carriers could be part of such bi-lateral treaties.