Solid performance In 2009 To Date Indonesia has maintained the strong start to 2009 shown by its tourist arrivals data. Approximately 3.56mn tourists visited the country during the January-July period, representing annual growth of 2.56%, according to figures from the Badan Pusat Statistik (Central Bureau of Statistics, BPS). At a time when its neighbours are struggling with falling visitor numbers, this is an impressive result.

However, the July bombing of two hotels in Jakarta by a terrorist group with links to al-Qaeda may lead to tourists staying away from Indonesia and the capital in particular. Against this backdrop, and with consumer demand already depressed by the global financial crisis, we still believe that a fall in tourist arrival numbers is the most likely scenario for 2009, with 2010 then seeing a slight rebound. As always, much will depend on the security situation in the country. If it can be stabilised, then BMI remains upbeat on the long-term potential for Indonesian tourism given its low-cost reputation.

Fresh Terror Attack Raises Fears Nine people, including the attackers, were killed when suicide bombers struck the Ritz-Carlton and Marriott hotels in Jakarta on July 17. A domestic terror group with links to al-Qaeda, Jemaah Islamiyah (JI), claimed responsibility for the attack, which caused significant damage to both properties and came just a few days before the Manchester United team was due to arrive in Jakarta. The attack was the first major terrorist attack since the 2005 Bali bombings and could revive tourist fears about the safety of travel to the archipelago.

EU Lifts Ban On Four Indonesian Airlines In July, the EU eased the ban on some Indonesian airlines that had been in place since 2007. Garuda Indonesia and Mandala Airlines, and the charter airlines Airfast and Premair, are now allowed back in European airspace, with the EU satisfied that ‘significant improvements’ had been made to safety within the industry. Foreign Minister Hassan Wirajuda told local media that Indonesia country had met 62 of the 69 safety requirements laid down by the EU. The lifting of the ban clears the way for the resumption of direct flights between Jakarta and the EU, with Garuda likely to launch services in 2010.

The lifting of the EU ban is a clear positive for the Indonesian aviation industry. Although no Indonesian carriers were flying to the EU when the ban was introduced, it acted as a deterrent to European travellers wanting to travel around the country on domestic flights. Both international and domestic services within Indonesia should benefit from the EU’s decision.