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Competition is the soul of an open market. When there is competition, all players are forced to offer the best service possible at the lowest price affordable. That is the very essence of capitalism — the survival of the fittest.

This, however, only works if an industry is open to all newcomers. When the government deregulated the aviation industry in the late 1990s, it breathed new life into the ailing domestic sector. The same principle also applied to the banking sector, where the entry of regional investors helped to professionalize the industry and introduce global best practices.

In the aviation industry, overnight, dozens of new airlines emerged to offer passengers affordable prices for domestic routes. Entrepreneurs such as Rusdi Kirana, founder and owner of Lion Air, met growing public demand with innovative services at rock-bottom prices. For the first time, air travel became affordable for millions of Indonesians as a result.

Deregulating the industry was a masterstroke by the government. Even though in the early days some operators took shortcuts on safety and maintenance standards, overall the industry has flourished. Passenger numbers are climbing steadily and new airports are being built across the country.

Against this background, we welcome the acquisition, by Singapore’s Tiger Airways, of a 33 percent stake in beleaguered carrier Mandala Airways. With Saratoga Capital already owning 51.3 percent, the new injection of cash and management know-how will help revive the carrier, formerly owned by the military.

Mandala’s survival and growth is crucial for Indonesia’s airline industry. Under the new ownership, the airline aims to fly within Indonesia and to international destinations within a five-hour flying radius. This will allow it to compete head-on with AirAsia as well as state carrier Garuda Indonesia, which will compel both carriers to up their game.

Mandala’s new owners have their work cut out for them, but both Saratoga and Tiger Airways have deep experience in their respective fields. Saratoga will ensure that the carrier adopts the right management and financial policies while Tiger Airways will inject industry knowledge and know-how. Ultimately, it will be the Indonesian consumer who will reap the benefits of superior service at an affordable price.