A compromise deal has broken the deadlock in air-rights negotiations between Singapore and Indonesia, though some sensitive issues remain.

Under the deal, Singapore’s full-service carriers will get a “modest expansion” to operate more flights to Jakarta and Bali. In return, Indonesian carriers will get “fifth freedom” rights, which allow them to pick up passengers at Changi and fly them on to other foreign destinations.

Ministers from both countries agreed to re-visit the issue of access for low-cost carriers in six months’ time.

The sensitive issue of air rights arose in March, when Indonesia announced it would stop giving out new landing rights to budget carriers for Medan, Surabaya, Jakarta and Bali.

At around the same time, Indonesian budget carrier Awair dropped its Singapore-Jakarta route after the Civil Aviation Authority of Singapore delayed giving it the green light.

The “in-principle agreement” drafted by senior transport officials from both sides came about Wednesday evening following a meeting in Jakarta on Tuesday night between Transport Minister Yeo Cheow Tong and Indonesian counterpart Hatta Rajasa.

Back in Singapore Wednesday, Yeo told reporters that officials had been left to work out the details after the ministers agreed on three main areas.

1) To increase air rights between Singapore and both Jakarta and Bali.

Singapore has used up its available rights on these routes, with Singapore Airlines and Valuair operating a total of 126 weekly flights to Jakarta, and SIA operating 42 to Bali.

The pact now gives local full-service carriers more slots to fly to the two destinations.

In exchange, Indonesian carriers will have more rights to pick up passengers from Singapore and offload them in another country. For Garuda Airlines, this means it could operate more than the current 20 weekly flights from Changi to Ho Chi Minh City, Bangkok, Beijing and Shanghai, or add more cities.

2) To let Singapore carriers fly to Yogyakarta and Bandung.

Both sides could not settle on this point, but have agreed to further talks.

3) To open talks on the issue of low-cost carriers flying between Singapore and Indonesia in six months’ time.

It is understood that Indonesia wants to give its carriers time to prepare for increased competition.

“What the minister explained was that high fuel prices have presented a huge problem … . They do not want to see the airlines being subjected to additional competitive pressure for the time being,” said Yeo.

But the Indonesian government does see the need for competition in the years ahead, he noted.

“Do not forget that the Indonesian market itself, domestically, is a highly competitive market. They have almost 30 domestic airlines. What they want to avoid is additional competition on international routes.”

Singapore also hopes to secure more rights to other Indonesian spots such as Medan and Surabaya in the future, he said.

Yeo said more air traffic could benefit both countries.

On Awair, Yeo said it would be welcome to fly here once the two nations had ironed out the low-cost carrier issue.

Wednesday’s pact will be finalised in the coming few weeks.