Indonesia's Minister of Transportation, Budi Karya Sumadi, says his department will conduct a study into the possibility of opening up the country's domestic market to foreign operators.
President Joko Widodo had touted the measure as a means of curbing spiralling ticket prices blamed on a lack of competition in the Indonesian market.
"Yes, the President's idea is very good, we will study it. God willing, it can be implemented," he was quoted by Kompas in Jakarta on Friday, May 31.
At present, the Southeast Asian archipelago is dominated by Lion Air Group and Garuda Indonesia Group (inclusive of Sriwijaya Air Group) which together control 95% of the country's weekly seating capacity of 2,630,274 seats/week.
According to the ch-aviation capacities module, Lion Air, Batik Air, and Wings Air (Indonesia) account for 49.48% while Garuda Indonesia and Citilink alongside Sriwijaya Air and NAM Air account for 45.97%. The remaining 4.55% is controlled by Indonesia AirAsia and various regional operators.
Indonesian law currently caps foreign ownership of locally-flagged airlines at 49%. In addition, any airline that intends to enter the domestic market must have a base in Indonesia itself.
