Indonesia Air plans to expand, launch scheduled, cargo services

The Jakarta Post, Jakarta

Publicly listed charter airline operator PT Indonesia Air Transport (IATA) is expanding its business into scheduled passenger and cargo services.

"We are planning to move, one step at a time, to open up scheduled services within the next two or three years," IATA president director Roekman Prawirasasra said Friday after a shareholders extraordinary meeting.

"Most airlines choose to compete on lucrative routes, such as the Jakarta-Surabaya route, but this company prefers to serve the eastern parts of the country," he said, adding that the company, which will serve the country's main tourist destination, Bali, and major cities in the eastern part of the country, saw major business opportunities in scheduled services.

IATA has purchased two ATR 42-300 airplanes for US$3 million each from the Denmark-based Nordic Aviation Contractor. In cooperation with tourism company PT Mirantha Nuansa Ayu, IATA has been flying one of the planes in Bali since earlier this month, while the other one is still in Denmark and will commence operations in May.

According to Roekman, IATA will purchase another three aircraft, either ATRs or Fokker 50s, in order to provide scheduled services.

The company is also considering whether to move into the cargo business, despite the current gloomy market conditions.

IATA plans to spend US$30 million on aircraft procurement this year alone.

Currently, IATA, with a fleet of 17 aircraft, provides services to a number of mining and forestry companies.

The firm, which is 79.8 percent owned by publicly listed PT Bimantara Citra, closed 2006 with a surging net profit of Rp 28.64 billion ($3.11 million), up by 89 percent from Rp 15.12 billion in 2005, despite a fall in company revenue.

Roekaman said that the increase in net profit was partly due to a decline of debt-repayment expenses.

IATA's revenue in 2006 fell by 12 percent to Rp 204.13 billion from Rp 231.05 billion in the previous year due to the strengthening of the rupiah against U.S. dollar.

For this year, IATA expects to boost its revenue and net profit by between 10 and 15 percent.