Indonesia's aviation industry struggles as the pandemic continues

Kuala Lumpur (VNA) – Indonesia's aviation industry is facing tremendous difficulties in the context of the COVID-19 pandemic and the lack of timeliness of the government in providing remedial solutions, said Agus Pambagio, a local public policy observer.

According to Agus, domestic Indonesian airlines namely Garuda Indonesia and Citilink, Sriwijaya and NAM and Lion Air Group) also have to face with the compulsory financial obligations from both domestic and international financial institutions/banks, pushing these companies to the brink of bankruptcy. Recently, several airlines such as Garuda Indonesia (GIAA), Lion Air and Batik Air have had to shut down their branches in Alice Spring or Port Headland, Australia, showing the financial decline of the airlines.

Some airlines have tried to maintain the operation by implementing a series of solutions such as cutting wages and laying off employees, but it seems to have no significant effect. GIAA reported revenue of 353.07 million USD in the first three months of 2021, down 54.03 percent year-on-year. Lion Air also failed to solve the financial crisis after laying off more than 8,000 employees and operating at only 15 percent of its capacity. Meanwhile, the aviation industry is one of the most vulnerable sectors to currency fluctuations and fuel prices, so the more vulnerable the sector is, the longer the recovery will be.

Aviation safety in Indonesia is also an issue during the pandemic. Staff and flight hours are reduced, maintenance and repair of equipment in the cockpit, passenger compartment or aircraft engine can hardly be carried out as they used to be. Over the past five years, many aviation safety issues have been overlooked.

Accordingly, Agus suggested Indonesia's aviation business need the state's support as soon as possible, especially in resolving outstanding debts. The Ministry of Transport, the Ministry of State Enterprises, the Ministry of Manpower and the Ministry of Finance should come up with a roadmap to deal with the post-pandemic consequences and implement it soon./.