Indonesia’s aviation industry, which has been hit hard by the COVID-19 pandemic, will need government incentives to recover, chairman of the Indonesia National Air Carriers Association (INACA), Denon Prawiraatmadja, said.
“For the aviation sector to recover, we need tax incentives and various airport fees,” Denon said in a statement issued here on Friday.
The aviation industry contributes more than 2.6 percent to the Gross Domestic Product (GDP) and provides jobs to 4.2 million workers, he noted.
As many as 36 companies under the association submitted a proposal seeking incentives to the Coordinating Ministry for Economic Affairs in March, 2020, but the ministry is yet to approve them, he said.
The industry would also need to offer payment flexibility to some aviation-related state enterprises, such as Pertamina, airport operator Angkasa Pura I and II, and air navigation firm AirNav, he added.
Pertamina is the only supplier of aviation turbine fuel (AVTUR), and spending on fuel accounts for 40-45 percent of airlines’ operational costs, he observed.
“That’s why we sought payment flexibility for AVTUR, navigation, and other fees for airport services provided by AirNav and Angkasa Pura,” he said, adding that the proposal is yet to be approved by the state enterprises.
Meanwhile, CEO of AirAsia Indonesia, Veranita Yosephine, said negotiations with the airport operator on payment delays or discounts for inactive planes parked at the airport are still underway.