Riau Airlines To Add Three More Planes To Meet Rule

Pekanbaru, Ria - Riau Airline plans to add three more planes to meet the requirement regulations of Law No. 1/2009 on flight services.

Samudra Sukardi, president of the airline, said Wednesday the additional planes were needed to prevent the airline, which is majority-owned by the Riau provincial administration and several other provinces, including Lampung, Bangka Belitung and Bengkulu, from being frozen by the Transportation Ministry.

Based on Article 118 of the law, Samudra said, each airline providing scheduled flight services is required to have 10 airplanes, of which five must be owned by the airline.

"Riau Airlines now operates seven planes to serve a number of domestic and regional routes, but only three of them belong to the airline," said Samudra in a hearing with Commission B of the Riau Legislative Council.

In addition to meeting the existing regulation, he said, the expansion of the fleet was also intended to support the airline`s plan to open new routes in Sumatra this year, with the aim of becoming an economic player in Riau.

Samudra further said the plan to add the planes and expand business would not burden the budget of the Riau administration or other shareholders.

He claimed the expansion would be conducted through cooperation with Riau Bank and Muamalat Bank, which had so far been supportive of the airline`s operations.

"I am unwilling to use funds from the regional budget, which I believe should be spent on building infrastructure throughout the province, not on business development," Samudra said, adding the three new planes were RJ-100 aircraft models with a 100 passenger capacity each.

A member of the Riau Legislative Council, Syamsul Hidayah Kahar, reminded the management to prepare the expansion plan as carefully as possible, claiming the airline was still suffering from financial losses.

Last year, for example, the airline suffered losses amounting to Rp 16 billion (US$1.45 million) and this fact, he said, would determine the bank`s decision to provide the loan.

"There must be a strong cohesive plan of cooperation. If it is viable, the bank will certainly provide the airline with the loans," Syamsul said after the meeting.

Syamsul also hailed the management`s decision not to use funds from the regional budget as the Riau administration had already allocated Rp 62.5 billion to the company, or 51 percent of the company`s total share of Rp 132 billion.

"Riau Airlines claims to have registered improvements in its financial condition after being led by Samudra`s management, but these profits have been used to pay debts," he said, explaining he did not know the exact amount of profit this year as the quarterly report had not yet been submitted to the Riau Council.

"If the claim proves to be true, I`m confident the management will be able to expand its business operations without burdening the budget of the Riau adminstration and other shareholders," he said. Rizal Harahap

Source: http://www.thejakartapost.com (14 May 2009)
Photo: http://indonesia-arab.blogspot.com

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