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Bali Needs a More Proactive Airport Management Approach

Antara Report Suggests that More Could Be Done to Attract and Retain International Air Routes to Bali.

(6/28/2008) The National News Agency Antara reports that over and above the problem of rising fuel prices, passivity and a less-than-proactive management of Indonesia's airports also plays a role in recent decisions by Qantas and Continental to end their scheduled flight services to Bali's Ngurah Rai international airport.

Antara quotes an unnamed business person from Bali's aviation sector as saying while rising fuels costs played a role in the two airline's decision to stop Bali flights, a lack of "attention" from the management of Indonesia's airports were also a factor in the decision to cease flying to Bali.

The source said that the incentive given to airlines by Indonesian airport operators were "minimal" and that, in fact, airport management (in Indonesia) are more inclined to "squeeze" airline operators by posting high airport use tariffs.

Conversely, the observer said that during difficult periods, such as the current oil crisis, many airport managers overseas actually extend special incentives to airlines by discounting service fees in order to preserve air service to their destinations.

The observer told Antara: "This is the problem, here at (Bali's) Ngurah Rai Airport a progressive tariff is in place that allows the first two hours of aircraft parking to be free, but for periods of more than two hours a multiple of the tariff if applied. Airports in Indonesia are expensive."

The anonymous spokesperson said that when oil prices increase the management of the airport should extend incentives to stimulate air commerce and maintain existing air corridors. Adding: "It's not that airlines donít want to fly, there just unable to pay Indonesia's non-competitive fees which contain no 'incentive discounts.' Our airlines are in a 'dazed' condition resulting from the sudden rise in oil world prices."

Staying in Touch with Our Customers

The observer also complained that Indonesia's Department of Foreign Affair, Department of Communications and the Ministry of Culture and Tourism were less than attentive in maintaining a sound business nurturing relationship with the host governments of the airlines that fly to Indonesia. He reasoned that with a strong lobby Continental Airlines would not have decided to withdraw from Bali and could, in fact, have been encouraged to add frequencies to Bali while stopping flights to Cairns in Australia. This was not done, he said, and Continental decided to cancel Bali while preserving its services to Cairns.

Continental's Manager Speaks

When Antara contacted the local manager of Continental Airlines at Bali's Ngurah Rai International Airport, Dara Mustika, she commented that some 50 destinations served by her airline have recently been cut with around 2,000 employees losing their jobs.

When asked about the cost of using Bali's airport, Mustika confirmed that in the course of a single visit by a Continental 737around US$3,000 in airport service fees are incurred.

Underling the impact of higher fuel costs, Mustika also advised that during the four-month period of January-April, Continental paid Pertamina US$412,000 for aviation fuel. This compares to only US$917,000 paid for fuel by the airline for the entire year of 2006 and US$1.065 for fuel for the entire calendar year of 2007.