Marcell Sihombing, Kartini L. Makmur

The official inauguration of the ASEAN Economic Community (AEC) in late 2015 also marked the beginning of the ASEAN Open Sky era within the Southeast Asia region. The ASEAN Open Sky era represents just one out of 12 priority sectors will eventually be integrated under the AEC framework, with the ultimate goal of boosting connectivity and the growth of the air-transportation industry within Southeast Asia.
“In order to achieve this goal, the AEC has ensured that all airlines from every ASEAN member country have the opportunity to access all international airports across Southeast Asia,” asserted Tengku Burhanuddin, Secretary General of the Indonesia National Air Carriers Association (Inaca), during a conference entitled Partnerships in Opening the Skies of South-East Asia, with Special Reference to the Position of Indonesia, which was held in Jakarta on Thursday, 7 April 2016.
Mr. Burhanuddin further revealed that the plan to establish the ASEAN Open Sky policy was originally initiated back in 2009 at the 13th ASEAN Summit, during which the idea of establishing the ASEAN Single Aviation Market (ASAM) was agreed upon.
Under the ASAM cooperation framework, three legal instruments have been formulated. The first instrument, is the Multilateral Agreement on Air Services (MAAS), which encompasses two protocols which will guarantee freedom of access for air traffic in certain airports, including Batam, Balikpapan, Biak, Makassar, Manado, Palembang, and Pontianak, as well as a number of airports in other ASEAN member countries.
The second legal instrument is the Multilateral Agreement on the Full Liberalization of Air Freight Services (MAFLAFS). This agreement contains six protocols which should ensure the freedom to access air traffic within ASEAN sub-regions, between ASEAN sub-regions, and between state capital cities. These sub-regions are divided into CLMV (Cambodia, Lao Republic, Myanmar, and Vietnam), BIMP-EAGA (Brunei Darussalam, Indonesia, Malaysia, Philippines, and the East ASEAN Growth Area), and IMT-GT (Indonesia, Malaysia, Thailand and the Growth Triangle).
And lastly, there's the Multilateral Agreement on the Full Liberalization of Passenger Air Services (MAFLPAS). This agreement contains two protocols which guarantee the freedom to access air traffic between all cities within Southeast Asia.
Mr. Burhanuddin firmly believes that the ASAM is a vital pillar which will support the AEC through the provision of a safe, efficient, and free flow of persons and goods from and to destinations situated within ASEAN member countries and also non-ASEAN member states. This will ultimately result in the realization of the AEC’s objective to create prosperity, high competitiveness, and economic integration based on markets and products.
However, Mr. Burhanuddin also noted that the ASEAN Open Sky policy is solely intended for the liberalization of international transportation services among ASEAN member countries and does not include domestic air-transportation businesses. This means that the policy does not violate domestic cabotage rights, which were defined at the Chicago Convention by the International Civil Aviation Organization (ICAO). Under this concept, every country has the right to prohibit foreign airliners from transporting passengers or goods within their territory. Thus domestic airlines serving domestic routes should be sufficiently protected from unwanted competition.
From a slightly different perspective, Mr. Burhanuddin also emphasized the need for government intervention in order to support Indonesian airliners during the ASEAN Open Sky era. Mr. Burhanuddin believes that in order to improve their competitiveness as they struggle to compete within regional and international markets, Indonesian airlines will still require government assistance. This is due to the fact that a number of government policies will have an impact upon their competitiveness.
“For example, the government should ensure the accessibility of financing facilities for the aviation industry, as well as impose a 0% import duty for the importation of spare parts for planes,” asserted Mr. Burhanuddin.
Also commenting on this issue was Alan Tan, an aviation law professor from the National University of Singapore, who highlighted the crucial issue of competitiveness for all Southeast Asian airliners. Mr. Tan revealed that the Southeast Asian airliners were not the only ones aiming to expand their markets within the region. In fact, many airliners other than those owned by ASEAN member countries airliners have already monopolized various routes.
Mr. Tan points to airlines from the Middle East, such as Qatar Airlines, which currently serves seven routes within Southeast Asia, and which has also secured 26 routes in Europe. This is in stark contrast with Southeast Asian airliners, only a small number of which have managed to expand their businesses to serve international routes such as those to Europe. Thai Airways and Singapore Airlines hold the top spot with 12 European flight routes, followed by Vietnam Airlines with three routes, Garuda Indonesia with two routes, and Malaysia Airlines with only one route.
“It could be said that a war to become the center of connectivity is underway. However, geographical issues will indeed prove a difficult issue to tackle,” concluded Mr. Tan.
(rfs/sp)