Travel Agents Accuse Batavia Air of Bankruptcy Foul Play

Passengers of Batavia Air gather in front of a ticket booth at the Sukarno-Hatta airport on the outskirts of Jakarta January 31, 2013. Indonesia's Batavia Air was declared bankrupt late on Wednesday by a court after it was unable to pay off debts, making it the second local airline to go bust in as many years in face of fierce competition in one of Asia's fastest growing markets. (Reuters Photo/Supri)

Passengers of Batavia Air gather in front of a ticket booth at the Sukarno-Hatta airport on the outskirts of Jakarta January 31, 2013. Indonesia’s Batavia Air was declared bankrupt late on Wednesday by a court after it was unable to pay off debts, making it the second local airline to go bust in as many years in face of fierce competition in one of Asia’s fastest growing markets. (Reuters Photo/Supri)

Two associations housing thousands of Indonesian travel agents have accused Batavia Air of purposefully concealing a bankruptcy declaration and making off with billions of rupiah deposited by the agents in the private carrier’s bank accounts.

The Indonesian Ticket Agents Association (Astindo)’s deputy chairwoman for ticketing, Pauline Suharno, said on Tuesday that about 1,200 travel agents in Jakarta alone reported that they may have lost a combined Rp 18 billion ($1.9 million) they had deposited with Batavia before the Central Jakarta Commercial Court declared it bankrupt on Jan. 30.

Pauline said the 1,200 travel agents were members of the Jakarta chapters of Astindo and the Association of Indonesian Tour and Travel Agencies (Asita).

She added that there were up to 1,600 other travel agents operating outside Jakarta who were similarly concerned about the uncertain fate of the money they had deposited at Batavia.

“All we want is for the curators to separate our deposits from Batavia’s assets. It’s travel agents’ money; the money that we deposited to ensure ticket issuance. It is not part of Batavia’s assets,” Pauline told the Jakarta Globe.

“We have asked for audiences to discuss the issue with the curators, the YLKI [the Indonesian Consumer Protection Foundation], the House of Representatives and Batavia Air; but none has responded to our request,” she added.

Pauline accused Batavia of committing a “criminal act,” saying it had hidden the fact that it faced a bankruptcy petition, allowing some travel agents to continue depositing their money as of the afternoon on Jan. 30, before the court delivered its verdict.

She added that Astindo had actually suspected Batavia’s deteriorating financial situation since mid-2012, when it began cutting some routes and reducing the frequency of a number of flights.

It started notifying its members to be wary of depositing their money at Batavia in January, but Batavia continued to deny it was having any financial difficulties.

“They kept receiving fresh cash flow from us. They should have admitted they were facing the bankruptcy petition instead of saying they were just fine, but they kept denying that. This is a criminal act,” Pauline said.

Batavia abruptly ended operations at 12:00 a.m. on Jan. 31 after the Central Jakarta Commercial Court ruled in favor of a bankruptcy petition filed by US-based aircraft leasing firm the International Lease Finance Corporation concerning a $4.68 million debt.

Batavia reportedly failed to pay leasing fees for an Airbus A330 fleet it leased from the US firm at the agreed upon deadline on Dec. 13, 2012. The airline was planning to use the fleet to serve Indonesian hajj pilgrims, but failed to win a bid for that.

Neither Batavia Air nor Indonesia’s Transportation Ministry spokesman Bambang S. Ervan could be reached for clarification on Tuesday over the travel agents’ allegations.