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Air Paradise to Fly Again?

Failed Bali Carrier Reported to Have Sold 49% of its Shares to an Unnamed Australian Carrier.

(8/26/2006) The Indonesian-language Bisnis Indonesia reports that Air Paradise International (API) has sold 49% of its shares to a yet-to-be-named Australian airline.

The Director of Civil Aviation at the Indonesian Department of Transportation, Santoso Edi Wibowo, told the press that the final composition of the foreign share holding is currently being sorted out at the Department of Justice. Indonesian law limits foreign ownership of a national airline to a maximum 49%.

Civil Aviation source have indicated that the government will continue to lobby API to operate on international routes, although local travel pundits theorize the purchase of the now defunct carrier is tied to plans by an Australian carrier to gain a footing in Indonesian lucrative domestic feeder routes.

Should the financial re-floating of API materialize, it will rescue the airline from the process now underway leading to final deregistration. API commenced services in February 2003 from Bali to Perth, Western Australia. Before its sudden closure in November 2005, it was operating flights to Perth, Sydney, Melbourne, Adelaide and Brisbane utilizing four Airbus aircraft and employing an estimated 350 staff.

Does Deal Hang on Approval of Feeder Services?

Government sources confirm that API is seeking government permission to operate a feeder service from Jakarta to Bali as part of its re-launch strategy. Meanwhile, the Minister of Transportation, M. Hatta Rajasa, announced his department is looking at API's request for feeder routes against the market demands for more seats over the Jakarta-Bali sector.

Signaling possible trouble ahead for the resuscitation plan for API, Minister Rajasa has said that the Jakarta-Bali route is already served with sufficient seat capacity and "not to expect" an approval in the near future as the request needs a thorough review from the Directorate General of Civil Aviation. Against the Minister's "go slow" attitude is the looming deadline of December 31, 2006, by which time API must recommence operations or risk permanently losing its operational licenses.