GOVERNMENT POLICY DESTROYS AIR TIMOR.
In January 2016 Air Timor recorded its best profit $940,000 and was sitting with $1.5 million in its Bank Account.
Air Timor Directors decided to commence Darwin flights, Increase Singapore Flights to 4 Schedules per week and commence Domestic Operations in early 2016.
A Government decision in late 2015 to grant NAM AIR (a wholly owned subsidiary of Sriwijaya) rights to fly from Denpasar to Dili meant the route was in total overcapacity. There were so many seats available compared to market demand that the three airlines could only achieve 50% or less Load Factor. Airlines usually need 70% to breakeven. Air fares dropped to $70 – far below normal market prices. Nam Air resorted to dumping its passengers onto Sriwijaya flights on low capacity days to stop the losses – Air Timor resorted to raising Capital to cover the huge losses running at $10,000 per day. Air Timor losses at December 2016 now exceed $3 million.
Director Abessy Bento said the company had expended millions of dollars to create Air Timor as a local Timorese Airline, had trained up local staff overseas and had attempted to build an airline Timor could be proud off. He said the IT systems worth over a million dollars, were second to none capable of connecting to Singapore Airlines and Garuda. It was the largest employer of local Timorese and the only one with the systems and the human capacity to be Timor’s National airline.
Over the last eight years we have built one of Timor’s best companies, been a big taxpayer and supporter of Tourism and support of the Government.
In one year Government policy has destroyed us.
Air Timor is extremely critical of the Vice Minister of Transport Inacio because he has permitted NAM and Sriwijaya to operate aircraft up to 22 years old (Regulation states 20 year maximum). In April 2016 the Vice Minister requested Air Timor to put on a new A320 Airbus from Jun1 as its existing aircraft was 18 years old and unreliable. He stated the other 2 Airlines would also comply and Nam’s flights would be stopped. Air Timor complied but the other undertakings did not happen.
The current Government policy to only support Indonesian Airlines and not support a local airline employing Timorese is wrong.
After twelve months of hard work we reached profitability on the Denpasar Route in December but now the Government has renewed NAM for 2017 further losses will occur – consequently we have to close this route on the 10th January. The Timorese public is now left with a monopoly –one company now controls the route operating 22 year old aircraft.
The low Prices on The Denpasar Route has also drawn passenger traffic from Singapore – so this route will be reduced from 3 flights per week to two per week from this month. If the Singapore route is not revived it will close in 2017.