Indonesia may open domestic market to foreign airlines

In a bid to increase competition in Indonesia’s domestic aviation market and drive airfares lower, President Joko Widodo is proposing opening the country’s domestic routes to foreign carriers. One of the fastest-growing aviation markets in Southeast Asia, Indonesia’s domestic services are dominated by flag-carrier Garuda Indonesia and its Citilink, Sriwijaya Air and NAM Air subsidiaries; Lion Air and its Batik Air subsidiary; and AirAsia Indonesia. However, Indonesian civil aviation authority DG Polana Pramesti said there is currently no interest by foreign carriers to enter the market, according to Indonesian news outlet Tempo. She said the cost of entry is too high and deters would-be investors. As with most joint ventures in the country, companies must be registered in Indonesia with a local company holding at least 51% of the venture. Foreign carriers wishing to run scheduled services must also operate at least 10 aircraft, five of which must be owned and the remainder leased.<br/>