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Threat to Revoke Indonesia Air Asia's Licence

Domestic Air Operators Increasingly Question Legality of Awair's Re-branding to Indonesian Air Asia.

(12/13/2005) Indonesia's Minister of Transportation, M. Hatta Rajasa, has declared he will not hesitate to suspend the operating licenses of Indonesia Air Asia - the new operating brand name for Awair Indonesia, if he obtains proof that more than 49% of the company's shares are held by foreign investors.

As reported on balidiscovery.com, the official name change for Awair now allows the Indonesian carrier to adopt a livery largely identical with its Malaysian shareholder's company Air Asia and its Thai affiliate, Thai Air Asia.

The Minister has threatened the strict shut down action if he finds that Air Asia - the Malaysian investors who purchased a 49% share in the Indonesian carrier for only US$2, now own a majority 51% share in the Indonesian air carrier; a situation specifically prohibited for a domestic air carrier under Indonesia's foreign investment laws.

According to reports carried in the Indonesian-language Bisnis Indonesia, the Indonesian National Air Carrier Association (INACA) has questioned the name change of Awair to Indonesia Air Asia, suggesting the move may represent a violation of Indonesia's air sovereignty and, at the very least, negatively impacts on the Country's image.

Indonesian domestic operators have complained that the joint-venture arrangements between Malaysian Air Asia and Awair have allowed the Malaysian air carrier to operate Indonesian domestic routes otherwise exclusively reserved for domestic air carriers.

Meanwhile, Indonesia Air Asia is steadfast in insisting that they are not a branch of Air Asia and that the re-branding of Awair more closely resembles a franchise agreement "similar to MacDonalds."

 

More information: http://www.balidiscovery.com/messages/message.asp?Id=2903