Jakarta – The government has been advised to learn from mistakes made in the shipping industry before implementing its plan to introduce an open skies policy in its effort to lower airfares in domestic services.
An aviation business analyst from the Indonesian Transportation Society (MTI), Suharto Abdul Majid, said foreign companies used to dominate domestic shipping services as they were once allowed to operate within the sector.
"It was a bitter time for the shipping industry before Presidential Instruction No. 5/2005 on national shipping empowerment was issued," he said on Sunday as quoted by tempo.co.
Suharto said before the regulation was issued, foreign shipping operators had control of 90 percent of shipping routes in the country. "Such an experience should not be repeated by the domestic aviation industry," he added.
President Joko "Jokowi" Widodo previously expressed interest in allowing foreign airlines to operate domestic services after the introduction of several regulations failed to lower airplane ticket prices, thereby affecting the tourist industry.
Suharto said many countries, including the United States and those in Europe, adhered to the cabotage principle in which the role of foreign airlines in their domestic services was limited, particularly in protecting their respective national aviation industries.
Under Law No. 1/2009 on aviation, foreign companies are only allowed to control 49 percent of an airline that operates a domestic flight. (bbn)