EU ban on Indonesian airlines good?

AIR transport is life blood for Indonesia. As the world’s largest archipelago, it remains to be the easiest way to travel. The country records some 21 scheduled carriers and another 36 charter or non-scheduled airlines. It is, in fact, South-east Asia’s biggest market in passengers’ traffic. Last year, Indonesian carriers transported some 37 million passengers on a total output of 50 million airlines’ passengers.Could the recent ban of Indonesian airlines in the European Union be a blessing in disguise? The announcement in early July had an electro chock effect for Indonesian authorities and also all the airlines management. It is true that Indonesian carriers have experienced a string of accidents over the last months with two crashes from Adam Air and Garuda early this year. The two unfortunate events had Indonesian authorities rushing to introduce more stringent security procedures. Audits on airlines security have been conducted and have seen nine airlines having their licences suspended and being grounded. The EU ban, which might however be lifted by October after meetings between EU and Indonesian officials, seems to have speed up necessary measures to modernise the aviation’s sector. Money is provided by countries such as Australia or Saudi Arabia for the training of air controllers and to assist airlines to implement IATA’s safety measures audits.It will also certainly speed up the renewal of airlines’ fleet. Last September, flag carrier Garuda announced a US$ 2 billion order to purchase 25 new Boeing 737-800 NG aircraft as part of its longterm business plan to upgrade its aging fleet and return the airline to profitability. The first Boeing planes will be delivered between 2009 and 2012. The carrier is expected to book a net profit of US$ 5 million this year after three years of losses. Garuda is also looking for 10 aircraft B787 Dreamliner for its long haul network with delivery expected from 2011.LCC Lion Air is the launch customer for the Boeing 737-900, which started to enter into service last May. The airline will receive 60 planes with an option for an additional 40 aircraft. They will be also be used to boost the airline’s nascent international network. Other LCC Adam Air already received its six first Airbus A320 and plans to build up its Airbus fleet to 30 aircraft over the next five years and 60 aircraft in the longer term.Adam Air is now looking to launch a second full-service carrier as the airline expects more competition from foreign airlines once the open sky policy within the ASEAN becomes effective. Mandala Air ordered at in June 25 Airbus A320 to renew its fleet. The Airbus will join the fleet between 2011 and 2014. The airline already will have this year 6 new aircraft Airbus A320 and A319. Indonesia AirAsia will also benefit from the integration of four Airbus A320 ordered by the AirAsia Group.