Photo: Special

JAKARTA (TheInsiderStories) – The island of Bali, Indonesia’s top tourist destination, has been struggling to deal with the eruption of Mount Agung last week, and has the potential of inflicting losses of up to Rp2 trillion (US$147.8 million) on the tourism industry, according to Indonesia Minister of Tourism Arief Yahya.

High-altitude layers of volcanic ash from the eruptions have prompted the closure of Bali’s main airport, leaving more than 50,000 travelers stranded.

‘If this were to continue for 36 days straight, we could lose around Rp2 trillion in income from tourists,’ complained Yahya on Thursday (30/11).

President Joko Widodo has ordered his ministers to undertake efforts to assist the return of tourists now stuck in Bali. President Widodo has instructed Minister of Transportation Budi Karya Sumadi, Tourism Minister, Bali Governor Made Mangku Pastika and Regency Heads in areas affected to deal with this urgent issue as well.

According to him, the government should expedite the return of the tourists, at the end of their holidays. Other options, such as the scheduled ferry from Gilimanuk on the western tip of Bali to Ketapang in East Java, can be selected to access nearby airports.

‘Do not abandon them when they are scheduled to return home from Bali just because the airport is closed,’ said Widodo.

The disruption is hurting businesses ranging from international airlines to street vendors. Tourism is by far the biggest industry on Bali, which was ranked as the world’s best destination by travel site TripAdvisor this year.

The eruption of Mount Agung in Bali has exerted a significant impact on the 15 million foreign tourist target to visit Indonesia this year. Yahya estimates that foreign tourist arrivals will only peak at 14 million, or 95 per cent of the projected total.

Tourism in Bali has suffered in the past. It declined significantly after deadly terrorist attacks in 2002 and 2005, which resulted in ‘a dramatic drop’ in local residents’ incomes. Volcanic activity across Indonesia has also disrupted air travel to Bali and other islands in recent years.

State-owned’s flag carrier PT Garuda Indonesia Tbk (IDX: GIAA) will be the most heavily exposed after the shutdown of Ngurah Rai International Airport. The disruption is also affecting AirAsia, the Kuala Lumpur-based budget airline. Neither Garuda nor AirAsia immediately responded to a request for comment on estimated losses.

However, the chaos engendered by the fine volcanic ash, which drifts high into the stratosphere and lingers weeks (and can inflict damage on jet turbine blades) should not have any major implications for the Indonesian economy as a whole. Bali only accounts for 1.5 per cent of the country’s total gross domestic product, according to Statistics Indonesia.

US$1: Rp 13,500

Written by Elisa Valenta, Email: elisa.valenta@theinsiderstories.com

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