Foreign Aviation Companies in Indonesia: Key Approvals and Licensing Requirements for Air Transport Services

Foreign aviation companies providing air transport services in Indonesia are subject to a layered regulatory framework combining international air services agreements and Indonesian aviation licensing requirements. The applicable requirements depend on the nature of the operation, including whether the service is scheduled or non-scheduled, commercial or non-commercial, and whether the foreign carrier operates independently or through cooperation with an Indonesian airline.

For foreign airlines, treaty-based traffic rights alone are therefore not sufficient to commence commercial operations in Indonesia. Depending on the proposed service, the carrier may also need formal designation, an Indonesian representative, route-specific approval, flight approval, and compliance with ongoing reporting and service obligations.

1. Commercial Aviation Operations Are Subject to Different Approval Regimes

Indonesian aviation regulations distinguish between commercial and non-commercial air transportation and, within commercial aviation, between scheduled and non-scheduled operations.

Commercial air transportation is provided for public use and involves the carriage of passengers and/or cargo for consideration. It may be conducted on a scheduled or non-scheduled basis by national or foreign carriers.

Non-commercial air transportation, by contrast, is generally conducted for internal corporate purposes and to support a company’s principal business activities outside the aviation sector.

This distinction is important because foreign companies seeking to operate scheduled international passenger services, charter flights, ad hoc cargo operations, or corporate aircraft in Indonesia do not necessarily follow the same licensing pathway.

For foreign aviation companies, the first regulatory question should therefore be the precise nature of the proposed operation and whether the company will be carrying passengers or cargo as a commercial air carrier.

2. International Scheduled Services Require a Treaty Basis and Carrier Designation

Foreign airlines cannot simply commence scheduled international services to Indonesia based solely on their foreign air operator certificate.

International scheduled commercial services must be supported by an applicable bilateral, multilateral, or plurilateral air services agreement between Indonesia and the relevant foreign state or states.

The foreign carrier must also be formally designated in accordance with the applicable agreement, with the designation approved by the Indonesian aviation authority. The treaty framework therefore determines the underlying traffic rights, while Indonesian regulatory approval provides the domestic legal basis for the carrier to exercise those rights.

This creates an important distinction between having traffic rights under an air services agreement and being authorised to operate a particular service in Indonesia. A foreign airline must satisfy both levels before commencing scheduled commercial operations.

3. Foreign Scheduled Airlines Must Establish a Recognised Indonesian Representation

Foreign scheduled airlines intending to conduct international commercial operations in Indonesia must appoint a representative in Indonesia.

The representative may be the foreign airline itself through a registered office or an Indonesian legal entity. The representation must obtain the relevant business licence through the Online Single Submission (OSS) system.

The licensing process requires supporting documentation concerning, among other matters, the appointment of the person responsible for the representation, ground-handling arrangements, acceptance of legal responsibility for the foreign airline’s operations to and from Indonesia, organisational structure, and rights to use the relevant office premises.

The representative is not merely a nominal local contact. It has substantive responsibilities, including conducting operational, administrative, marketing and sales activities for the foreign airline and representing the airline in legal matters in Indonesia, including disputes arising from flight operations.

A foreign airline may also appoint an Indonesian legal entity as a General Sales Agent (GSA) for marketing and sales activities.

4. Indonesian Representatives Have Continuing Reporting and Compliance Obligations

The regulatory obligations continue after the representative’s licence has been obtained.

Representatives of foreign scheduled airlines must manage the airline’s operational and administrative interests in Indonesia and accept legal responsibility for consequences arising from the operation of the airline’s aircraft to and from Indonesia.

They must also periodically report air transport activities, including reporting on a quarterly basis, and notify the authorities of relevant changes involving the representative’s appointment, organisational structure, cooperation arrangements, representative offices, and sales partners.

These obligations make the Indonesian representative an important part of the foreign airline’s regulatory infrastructure rather than simply a sales or liaison office.

Foreign airlines should therefore ensure that the representative has sufficient authority, personnel, documentation, and operational capability to discharge its regulatory responsibilities.

5. Scheduled International Flights Require Route-Specific Approval

Even after obtaining the necessary treaty-based designation and establishing an Indonesian representative, a foreign scheduled airline must obtain route-specific approval before operating an international scheduled route.

The relevant approval is the Penetapan Pelaksanaan Rute Penerbangan Luar Negeri or International Flight Route Implementation Determination, issued by the Director General of Air Transportation.

The determination is route-specific and applies for the relevant IATA season. In assessing an application, the aviation authority may consider the availability of traffic rights, technical and airport capabilities, fleet and aviation personnel, aviation services, and the balance between demand and supply.

The application must also be supported by documentation such as the proposed route, aircraft type, frequency and schedule, slot-allocation recommendation, relevant government designation documents, aircraft utilisation and rotation information, and valid foreign operational specifications.

Accordingly, a foreign airline should not treat the existence of an air services agreement or carrier designation as equivalent to approval to sell tickets on a particular Indonesian route.

The Indonesian regulatory framework expressly links route approval to the ability to conduct and market scheduled commercial services.

6. Non-Scheduled Foreign Commercial Flights Require Flight Approval

Foreign airlines operating charter, ad hoc passenger, cargo, or other non-scheduled commercial services are subject to a different approval mechanism.

A foreign non-scheduled commercial air carrier using a foreign civil aircraft must obtain Persetujuan Terbang or Flight Approval for the relevant operation. The application must generally be submitted before the flight, with the applicable framework requiring submission no later than three days before execution.

The application requires supporting documentation including the foreign carrier’s AOC or operating certificate, aircraft registration and airworthiness certificates, pilot licences, insurance, flight-plan information, passenger or cargo manifests, and relevant charter or contractual documentation.

Diplomatic and security clearances are also required as part of the approval process.

Unlike a scheduled route determination, flight approval operates on an operation-specific basis. A foreign carrier therefore cannot assume that approval for one charter or ad hoc operation creates a standing right to conduct subsequent flights.

Non-scheduled operations must also be conducted consistently with the regulatory framework governing existing scheduled services.

7. Foreign Airlines Must Comply With Business Licensing and Service Standards

Commercial air transport may only be conducted by business entities holding the required business licences.

For scheduled foreign airlines, this licensing framework operates alongside treaty-based traffic rights, carrier designation, route determinations, and the airline’s foreign operating approvals.

Foreign carriers must also comply with applicable service standards and consumer-protection requirements when providing commercial services in Indonesia. These requirements include communicating the relevant service category and specifications to passengers and implementing service standards for ordinary passengers as well as passengers with special needs.

Accordingly, regulatory compliance does not end once a foreign carrier has obtained permission to operate a route. The carrier must continue to comply with Indonesian requirements governing its interaction with passengers and the provision of air transport services.

8. Code-Share Arrangements With Indonesian Airlines Are Regulated

Foreign airlines seeking to enter the Indonesian market through code-share or other cooperation arrangements with Indonesian carriers are subject to additional requirements.

Code-share arrangements may be implemented between Indonesian and foreign airlines for international services and, subject to specific conditions, for domestic services.

The operating carrier must hold the relevant route implementation approval. Both the operating and marketing carriers must also provide passengers with clear information concerning the identity of the airline actually operating the flight, the route and flight number, aircraft type, schedule, and applicable services.

Domestic code-share arrangements are subject to particularly important restrictions for foreign airlines. Where a foreign airline participates in a domestic code-share arrangement with an Indonesian scheduled carrier, the Indonesian carrier must operate the domestic segment. The foreign airline may not sell passenger or cargo tickets for the relevant domestic sector.

This effectively preserves Indonesia’s cabotage restrictions while allowing certain commercial cooperation arrangements between Indonesian and foreign carriers.

Cooperation agreements must also take into account applicable air services agreements and Indonesian competition law and must be reported to the Director General of Air Transportation.

9. Operating Without the Required Approval Can Trigger Serious Sanctions

The approval requirements applicable to foreign aviation companies are not merely procedural.

Indonesian aviation law establishes criminal liability for operating a foreign civil aircraft in Indonesian territory without the required central-government approval. Such conduct may result in imprisonment of up to five years or a fine of up to IDR 2 billion.

Indonesian law also provides criminal sanctions for conducting domestic commercial air transport without the required business licence.

Separately, administrative sanctions may apply for failures such as operating scheduled international services without the required route determination, conducting non-scheduled foreign commercial flights without Flight Approval, failing to properly establish and maintain a foreign airline’s Indonesian representation, or failing to comply with reporting requirements for cooperation arrangements.

The combination of criminal and administrative enforcement means that foreign carriers should obtain the relevant approvals before commencing operations rather than treating licensing as a post-operation compliance matter.

10. Key Compliance Considerations for Foreign Aviation Companies

Foreign aviation companies considering Indonesian operations should assess the regulatory pathway according to their intended business model.

For scheduled international services, the key issues include:

• the existence of an applicable air services agreement;
• formal designation of the foreign carrier;
• establishment and licensing of an Indonesian representative;
• route-specific approval from the Director General of Air Transportation;
• availability of traffic rights and airport slots;
• submission of valid foreign operational specifications;
• compliance with passenger service and consumer-protection requirements; and
• continuing reporting and representation obligations.

For non-scheduled commercial operations, the focus shifts to:

• diplomatic and security clearance;
• Flight Approval for each relevant operation;
• valid AOC or operating certificate;
• aircraft registration and airworthiness documentation;
• pilot licensing;
• insurance;
• passenger or cargo manifests; and
• charter or other contractual documentation.

For code-share and other cooperation arrangements, foreign airlines should additionally assess route approval, passenger disclosure, domestic cabotage restrictions, competition-law considerations, and reporting obligations.

Conclusion

Foreign aviation companies can provide air transport services to and from Indonesia, but access to the Indonesian market is governed by a layered approval system.

For scheduled international services, an air services agreement and carrier designation provide the treaty foundation, but the foreign airline must also establish a compliant Indonesian representation and obtain route-specific approval before operating and selling services on the relevant route.

For charter and other non-scheduled operations, the principal gateway is operation-specific Flight Approval supported by diplomatic, security, aircraft, crew, insurance, and operational documentation.

Foreign airlines using Indonesian carriers for code-share arrangements must also account for route approvals, disclosure obligations, competition rules, and, importantly, restrictions preventing foreign carriers from selling tickets for domestic sectors.

The practical implication is that traffic rights, business licensing, route approval, and flight approval should be treated as separate regulatory requirements. Foreign aviation companies should map each approval before launching services, changing routes, introducing charter operations, or entering into code-share arrangements with Indonesian carriers.

This alert is part of a series examining regulatory and market-access requirements affecting foreign aviation companies and investors in Indonesia. Please feel free to contact us should you wish to discuss these requirements further.

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