first_imgTransportation companies are seeking government financial support to stay afloat following the imposition of social restriction policies across the nation, which has brought the industry to a virtual standstill.The Indonesian Chamber of Commerce and Industry (Kadin) stated that almost all companies in the air, land and sea transportation and services sectors had been hard hit by the COVID-19 outbreak.The epidemic and the government’s delayed response have crippled almost all business activities in the country. In aviation, border closures and flight cancellations had caused loss of earnings of 20 to 50 percent for airline companies since January, Kadin said.Earlier on March 26, Indonesian National Air Carriers Association (INACA) chairman Denon Prawiratmadja said that airlines had seen a drastic fall in passenger numbers since early March, which prompted all airlines to cut frequency and routes by 50 percent and above.To offset the losses, several airlines had temporarily suspended operations and laid off some employees, Denon said.The airline support services sector had also been affected, with the Indonesian Ground Handling Association (AGHI) reporting an 80 percent drop among its members in services.“If the number of flights keeps declining, the ground handling sector will collapse and several AGHI members could be facing bankruptcy,” AGHI chairwoman Ida Pangelingsir said on Monday.Land transportation is also facing a similar situation, with the PSBB policy in Greater Jakarta and the government’s call to reduce nonessential travel cutting into the sector’s earnings.Kadin data shows that land-based logistics and land transportation companies had suffered declines in revenue of respectively 25 to 50 percent and 75 to 100 percent since early March.In the capital city, the epicenter of Indonesia’s COVID-19 outbreak, demand for public transportation had dropped by an unprecedented 90 percent from early March until April 10, when the Jakarta administration imposed the PSBB for a period of 14 days.Public transportation services will limit passenger numbers to 50 percent of their capacity and restrict their operational hours from 6 a.m. to 6 p.mJakarta chairman Shafruhan Sinungan of the Organization of Land Transportation Owners (Organda) said on Monday that many transportation companies in the capital had to lay off their workers to offset the sudden plunge in demand. He also warned that small transportation companies could collapse if the current situation continued.“For big companies, they still have sufficient cash flow to pay their workers,” he said, but warned that they could sustain cash flow only “for the next month or two”.Carmelita said the transportation industry needed substantial assistance through a government rescue package to weather the health emergency. In particular, land transportation companies were hoping to be granted a 12-month exemption starting this month from nontax tariffs (PNBP), which was stipulated in Government Regulation No.15/2016.They also sought a six-month exemption from vehicle tax (PKB) and a wage relief scheme for drivers and other employees to cushion the epidemic’s economic impact on the transportation industry.Meanwhile, airlines have requested a six-month deferral for income tax (PPh 21 and PPh 23), airport fees, navigation fees, and jet fuel, as well as an exemption from aircraft parking fees.Airline companies also hoped that the government’s earlier tourism stimulus package, specifically the discounted tickets to the “10 New Balis”, could be reallocated as wage relief schemes for employees and flight crew that were on unpaid leave or had been laid off.Maritime transportation and shipping companies were seeking government support through a loan repayment moratorium, tax deferrals and docking fee exemption to offset potential losses from the pandemic, said Kadin’s Carmelita.President Joko Widodo in March announced additional funds of Rp 405.1 trillion (US$24.8 billion) to finance the country’s COVID-19 prevention and control scheme, including Rp 150 trillion for economic recovery and Rp 70.1 trillion in tax incentives and corporate credit as part of a business stimulus package.Topics : Kadin deputy chair Carmelita Hartoto said that the transportation industry, which had been declining since late February, had seen conditions worsen following the government imposed the social distancing policy in mid-March.“After meeting with transportation companies, it must be said that the transportation sector as a whole has been affected by the COVID-19 pandemic,” Carmelita said in a press release on Monday.She said that the stay-at-home social distancing policy, combined with the closure of tourist sites and shopping centers had contributed to the sector’s plummeting earnings.Kadin data shows that sea transportation companies recorded a 15 percent decline in revenue in March. The declining trend is expected to continue as Jakarta and its satellite cities impose the large-scale social restrictions (PSBB), an expanded policy that carries harsh sanctions for violators.last_img