IT COULD be said that the airline market in Indonesia is only controlled by a handful of big players. This is because this business requires very large capital. Lion Air and Garuda Indonesia are the two largest airline groups currently in the country, both in terms of fleet size and routes.
However, looking back, many airlines in Indonesia have actually collapsed. The causes are varied, including financial problems, being in debt, mismanagement, being unable to compete, plane crashes, and having their permits revoked by the government.
The following is a list of 11 Indonesian airlines that have now gone bankrupt:
1. Adam Air
In its heyday, this private company was touted as the best low-cost airline in Indonesia. The range of routes and additions to the aircraft fleet have been expansive since it was founded in 2002.
However, an unfortunate accident caused Adam Air’s reputation to collapse instantly. At that time, the Adam Air KI 457 plane on the Jakarta-Manado route had an accident over Majene waters after disappearing from radar. All 102 passengers and crew died.
Not long after the accident, the government revoked his flying permit on June 19 2008, which marked the end of Adam Air’s operations in Indonesia.
2. Merpati Airlines
Merpati is a government-owned airline that has operated since the era of President Soekarno, to be precise, this company was founded in 1962.
At that time, there was no adequate transportation to connect Indonesia, which is an archipelago from Sabang to Merauke. Thus, the government felt the need to build an airline that specifically served pioneer flights.
For decades, Merpati experienced financial problems, but was always rescued by the government. Several times the government has made restructuring efforts. At its peak, Merpati stopped operating in 2014 due to continuing losses and debt. Even though Merpati has stopped operating, the government has not yet decided to liquidate the airline.
3. Batavia Air
This airline, called PT Metro Batavia, began operating on January 5 2002. Batavia Air not only serves domestic flights, but also a number of international routes using Airbus A330-300 and A320-200 aircraft.
On January 30 2013, Batavia Air was declared bankrupt by the Central Jakarta District Court due to an application submitted by the aircraft leasing company International Lease Finance Corporation (ILFC). Since then, the airline has stopped operating and gone bankrupt.
4. Sempati Air
This airline was founded in December 1968 and operated in March 1969 under the name PT Sempati Air Transport. The airline underwent major expansion during the late 1980s to 1990s.
Sempati Air also served scheduled flight routes to Singapore, Kuala Lumpur and Manila. This airline is also known for its excellent service. However, Sempati then went bankrupt and this coincided with the monetary crisis that hit Indonesia in 1998. Reportedly, the bankruptcy was also caused by management errors.
5. Mandala Airlines
Mandala Airlines, which was later named Tigerair Mandala, first operated on April 17 1969. This airline was then purchased by Indigo Partners and Cardig International in 2006.
Due to debt problems, Mandala stopped operating on January 12 2011. At the end of February 2011, creditors agreed to restructure Mandala’s debt into shares and it resumed operations in June 2011.
As part of the restructuring, the majority shareholders are PT Saratoga Investment Group (51%), Tiger Airways from Singapore (33%), as well as existing shareholders and creditors (16%). However, Mandala stopped its operational activities starting July 1 2014 because market conditions fell and operational costs increased due to the depreciation of the rupiah.
6. Bouraq Indonesia Airlines
This airline was founded in 1970 by Jerry Albert Sumendap, an entrepreneur who was in the timber business. Bouraq reached the peak of his business in the 1980s.
In 1995, Jerry Sumendap died and his position was replaced by Danny Sumendap who carried out major restructuring in line with intense competition. However, this effort was unsuccessful until in 2005 the airline was declared bankrupt.
7. Bali Air
Even though it takes the name Bali, Bali Air is actually an airline based in Jakarta. This company is also not owned by Balinese, but Jarry Albert who comes from Manado who is none other than the owner of Bouraq Airlines. This airline was founded in 1973, but since February 2007 its operations have been discontinued.
8. Jatayu Airline
Jatayu Gelang Sejahtera or better known as Jatayu Airlines is an airline based in Jakarta. Jatayu was founded in 2000 and has operated domestic and international flights.
The founder is a businessman from Yogyakarta, Suntinah, whose first flight was the Jakarta-Yogyakarta route. Later, the owner switched to Wiryanto Lie. Apart from the financial problems that plagued it, this airline’s operating permit was later revoked by the Ministry of Transportation in 2007 because it was deemed not to meet safety aspects.
9. Awair Airline
Awair is an extension of Air Wagon International. This airline was founded in 2000 by Abdurrahman Wahid who was also the 4th President of the Republic of Indonesia. This airline did not actually go bankrupt because its operations were taken over by the Malaysian airline, Air Asia.
10. Star Air
Star Air is an airline that was founded in 2000, a time when private airlines in Indonesia emerged after the government launched aviation deregulation in Indonesia. Later, Star Air’s license was revoked by the Ministry of Transportation in 2005 so that the airline’s operations then stopped completely.
11. Linus Airways
Linus Airways is an airline that focuses on regional flights, especially serving inter-island routes to Sumatra. The cities served by this airline are Pekanbaru, Medan, Semarang, Palembang, Batam and Bandung. Linus itself is short for Lintasan Nusantara. The company was founded in 2004, but in 2008 operations were discontinued. [kompas.com/photo special]