Indonesia’s aviation needs revamp

JAKARTA  Indonesia urgently needs an aviation masterplan addressing safety, capacity and regulations, according to the International Air Transport Association.
In a keynote address to mark IATA Aviation Day in Jakarta, IATA’s director general and CEO, Tony Tyler, called on Indonesia’s stakeholders to partner in the development of an aviation masterplan to ensure the country was served by an aviation industry performing at its best.
He identified three core elements to be addressed in the masterplan; improving safety, ensuring capacity and creating a smart regulation framework.
“Indonesia’s aviation potential is huge. By 2034, it is expected to be the sixth largest market for air travel. By then some 270 million passengers are expected to fly to, from and within the country,” said Tyler.
inside no 9 Tony Tyler
Tony Tyler
“Indonesia needs an aviation masterplan developed in partnership by aviation stakeholders including the government. Such a plan should set a common vision for addressing top priorities such as safety, capacity and regulation. And of course it must be followed by real actions.”
Indonesia has had at least one hull loss every year since 2010. In the International Civil Aviation Organisation’s (ICAO) Universal Safety Oversight Audit Programme (USOAP), Indonesia was assessed as below the global average.
The US Federation Aviation Administration downgraded Indonesia to Category 2 in its International Aviation Safety Assessment programme while the EU continues to have a ban on all but five Indonesian carriers.
IATA noted Indonesia is investing resources to improve safety. The most recent being a partnership for quality workshop that was held in Jakarta, last week, with the support of Garuda.
“Indonesia is not, however, taking full advantage of IATA’s resources,” said Tyler. ” The IATA Operational Safety Audit (IOSA) is a global standard and is at the core of our efforts to improve safety. But of the 62 Indonesian airlines operating scheduled or chartered flights, only Garuda is in the IOSA registry. Making IOSA compulsory for an Indonesian AOC will send a very strong signal of commitment to improve safety. And experience shows us that it will make a difference in safety performance.”
On capacity Tyler noted that Indonesia’s traffic growth needs to be supported by aviation infrastructure, both on the ground and in the air. For Indonesia this means building a world-class hub, managing scarce capacity to global standards and modernising air traffic management.
By 2034, Indonesia’s airports are expected to handle an additional 183 million passengers compared to today.
Tyler commended the government for its plans to expand infrastructure –building another 62 airports over the next five years, and terminal expansions at Jakarta’s Soekarno-Hatta International Airport.
“But the capacity problem in Jakarta is nowhere near being solved even with the terminal upgrades. Indonesia needs a hub. The most efficient solution is to maximise the potential of one airport – Soekarno Hatta where significant investment has already been made,” said Tyler.
On regulations the IATA CEO said it was important to have government regulations which were consistent with global standards and facilitate success and growth.
inside no 9.1“But Indonesia has several regulations which are counter-productive and which treat airlines unlike any other comparable business,” said Tyler.
Tyler questioned the following examples:
Airlines are required to sell air tickets in Indonesian Rupiah, yet their suppliers – ground handlers and fuel suppliers – can bill them in US dollars.
Despite the competition in the market, airlines must price within regulated limits
Airlines are forbidden from selling tickets at airports when train tickets can be purchased at a train station
Indonesia has mandated a 2% biofuel blend for aviation jet fuel uplifted in Indonesia by 2016. Yet there is no control on the price or subsidies on the production side.
Tyler encouraged Indonesia to apply smarter regulation principles when establishing new regulations. These include clearly defining the problem to be solved, consulting with the industry, conducting rigorous cost-benefit analysis and ensuring consistency with global standards where they exist.
Tyler also encouraged Indonesia to implement international conventions which help integrate the country into the global system. He cited the example of the Montreal Convention 1999 (MC99). MC99 is a comprehensive instrument which governs liability in 110 states. Under MC99, the compensation limit for personal injury or death is set at around USD160,000.
“The AirAsia accident provides a very sad example of the consequences of Indonesia’s failure to implement the Montreal Convention 99 (MC99).”
The families of passengers who had bought return tickets from Singapore were covered under the MC99 limit. But the families of those who had purchased their tickets and started their journeys in Indonesia have a treaty cap of around USD12,000.
“I understand that the Indonesian government took special measures to increase this amount. Having a treaty in place would have been a better solution,” said Tyler.

sourced:ttrweekly.com