American Airlines and Japan Airlines Thank U.S. Department of Transportation on Final Order Allowing Antitrust Immunity

Date: 4 August 2010

Jakarta – The International Air Transport Association (IATA) outlined the priorities for Indonesia’s aviation industry. “Now is the time to plan and build for the future. With 240 million people living on thousands of islands and great world-class tourist attractions, the potential for aviation to grow and drive economic development is enormous. Coordinated government policies to ensure safety, cost-efficient and effective infrastructure and environmental sustainability are needed,” said Giovanni Bisignani, IATA’s Director General and CEO.

“Indonesia has a remarkable story to tell. The country weathered the global financial crisis better than most with a 4.5% GDP growth in 2009. And the turnaround at Garuda has been dramatic. While the world’s airlines were generating losses, Garuda’s passenger demand grew by 3% and they improved net profits by over 50% in 2009. Everyday brings new challenges and Garuda is well-placed to face them,” said Bisignani.

“The good news for Indonesia is that Asia Pacific is expected to be the most profitable region this year,” said Bisignani. Asia Pacific is leading the recovery with forecast profits of $2.2 billion and strong traffic growth. June passenger and cargo traffic for the region grew at 15.5% and 29.8% respectively, above the global average.

While in Jakarta, Bisignani met with Indonesian Vice President Prof. Dr Boediono, airlines and infrastructure operators and ASEAN leaders.

IATA laid out three priorities for Indonesian aviation: safety; cost-efficient and effective infrastructure and environmental sustainability.

Safety: “Safety is always the top priority. Safety issues require constant attention and commitment. There have been three non fatal accidents involving Indonesian airlines this year. And there were 5 accidents involving Indonesian operators in 2009, and 24 over the past 5 years. The situation is improving, but the damage done to Indonesia’s safety reputation will not be solved with short-term measures. A long-term strategic commitment is needed from both industry and government. I encourage the Indonesian government to make the IATA Operational Safety Audit (IOSA) a national requirement. It will ensure best practice in operational safety with global standards. And it will be a strong signal to the world that Indonesian aviation safety is moving in the right direction,” said Bisignani. Garuda and Mandala Airlines are the only two Indonesian airlines currently on the IOSA registry.

IATA is also working with the Indonesian government to improve safety by sharing global best practices through safety seminars and by supporting Indonesia’s implementation of the ICAO Global Aviation Safety Plan.

Infrastructure: Bisignani identified infrastructure as being critical to support Indonesia’s traffic growth. “With the completing of Terminal 3, Jakarta’s airport has the capacity to handle 38 million passengers a year. But passenger numbers are already topping 36.5 million with the government predicting 10% annual growth. Jakarta’s airport infrastructure will not be able to cope. There is no time to waste. Planning and implementation of the next stage of development is critical. It is very important that airport operators engage airlines in meaningful consultation to make the most of the current infrastructure and to plan for future developments,” said Bisignani.

“We do not see the cost-efficiency improvements in Indonesian aviation infrastructure that we see in other parts of the region. We appreciate that the increases announced in 2001 have not been enforced. But to remain competitive, the focus must be on cost-reduction. I encouraged the government to challenge Angkasa Pura 1 and Angkasa Pura 2 to deliver greater cost-efficiency,” said Bisignani.

Environment: The aviation industry has agreed to three targets: (1) improving fuel efficiency by 1.5% a year to 2020; (2) capping emissions with carbon neutral growth from 2020, (3), cutting emissions in half by 2050 compared to 2005 levels. “All growth must be environmentally sustainable. I encourage the Indonesian government to support aviation’s aggressive and responsible approach to climate change,” said Bisignani.

“We need a global approach for aviation, not local excuses for governments to gain access to new sources of taxes. We must also take a strong stand against regional schemes like the EU Emissions Trading Scheme. I hope Indonesia will be a strong voice against Europe’s unfair and ineffective plans,” said Bisignani.

Bisignani praised Garuda for taking the lead in implementing the IATA industry standard carbon offset program – an industry-wide management service that delivers best practice, standard methodologies and quality control. He also suggested that Indonesia explore the possibilities of producing biofuels source crops such as camelina, jatropha, and algae.