In a bid to increase competition in Indonesia’s domestic aviation market and drive airfares lower, President Joko Widodo is proposing opening the country’s domestic routes to foreign carriers.

One of the fastest-growing aviation markets in Southeast Asia, Indonesia’s domestic services are dominated by flag-carrier Garuda Indonesia and its Citilink, Sriwijaya Air and NAM Air subsidiaries; Lion Air and its Batik Air subsidiary; and AirAsia Indonesia.

However, Indonesian civil aviation authority director general Polana Pramesti said there is currently no interest by foreign carriers to enter the market, according to Indonesian news outlet Tempo.

She said the cost of entry is too high and deters would-be investors. As with most joint ventures in the country, companies must be registered in Indonesia with a local company holding at least 51% of the venture. Foreign carriers wishing to run scheduled services must also operate at least 10 aircraft, five of which must be owned and the remainder leased.

The president pressured Garuda in February to lower airfares by 20% following a public outcry over high fares. Widodo has been an advocate of growing the country’s air transport sector, and the government has launched a campaign to increase tourism to sites outside of Bali, such as Labuanbao, Wakatobi and Morotai Island.

Chen Chuanren, chuanren@purplelightvisuals.com