Air cargo industry faces problems

Saturday, August 18, 2007
The Jakarta Post, Jakarta

A lack of regulations and airport facilities has made Indonesia's air cargo industry virtually stagnant during the past several years, as investors are reluctant to enter the business, says an executive.

Chris Kanter, spokesman for the Indonesian Chamber of Commerce and Industry (Kadin), said Wednesday legal uncertainty and poor airport facilities had contributed to slow growth in the industry.

Speaking at a seminar on the modernization of Indonesia's air cargo services, Kanter said it would be difficult under current conditions for local air cargo companies to expand their business, especially to untapped markets in eastern Indonesia.

"Until now, limited regulations have been imposed on air and sea cargo services. We need to formulate a law on cargo service in order to control service standards and quality," Kanter said.

He also said facilities and financial support from the government, as well as the use of the latest technology, were also important for growth in the air cargo industry.

Indonesia's air cargo services are still dominated by foreign express companies such as Fedex and Polar Air Cargo and foreign airlines such as China Airlines, Eva Air, Korean Airlines, Malaysian Airlines, Singapore Airlines and Qatar Airways.

Local air cargo service providers such as PT Republic Express, PT Cardig Air and PT Tri MG face difficulties in expanding their business due to legal issues and the poor conditions found at airport terminals.

Hemi Pamuraharjo, deputy director for domestic flight services at the Ministry of Transportation, acknowledged there were no specific regulations for cargo services in Indonesia.

Hemi said the only regulation the country has is a colonial Dutch regulation, Staatblad 139, which only outlines the responsibilities of cargo flight carriers but mentions nothing about the system of cargo transportation.

President director of RPX Airlines Iwan Tirtawidjaja said within the last decade air cargo volume had steadily decreased, especially at airports in the eastern part of the country.

According to data from the Ministry of Transportation, a slight increase occurred only in the country's main airports; Soekarno-Hatta in Jakarta, Juanda in Surabaya and Hasanuddin in Makassar.

Data from state-owned airport operator PT Angkasa Pura II indicates cargo volume in Soekarno-Hatta Airport reached more than 370,000 tons in 2006, with an average annual growth of 5 percent since 2000. (02)