Description
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Indonesia is an archipelagic state which consists of around 17,000 islands. With the rapid development of aviation technology, air transportation has become the solution to develop the national economy by connecting those islands, especially between the main islands and the remote areas or islands (also known as "pioneer routes"). There has been a long history in regards to the Indonesian pioneer routes and its realization in form of "pioneer flights". The existence of the latter, namely by utilizing small aircraft, is proven crucial for many people living in the archipelago such as to ensure there is no scarcity of basic needs in remote areas or islands. However, this kind of route is not a trunk route which means it is less attractive for businesses. The objective of granting state aid (or subsidy) under PSO for pioneer flights is to ensure that people living in the remote areas and islands could have an adequate access to the world. Unfortunately, there is still no clear stateaid guideline for airlines in Indonesia and the Association of South East Asian Nations (ASEAN). A gap exists, creating the potential for future problems in an ever increasingly competitive airline market.
