Less than three years after it was set up, Bali-based Air Paradise International flew its last flight on Wednesday.

"I apologize to the people of Bali and those in the Bali tourism (industry). Under these conditions, we are forced to halt the operation of Air Paradise," Kadek Wiranatha, company chairman and owner of the airline said when announcing the decision in Bali on Wednesday.

He said the airline, which had concentrated on the Australian market after closing its routes to Japan and South Korea a few months ago, had immediately began to feel the pinch from the October 1 attacks in Bali, with flight cancellations pouring in as early as the morning after the blasts.

Wiranatha's statement clearly struck home.

"One flight less means fewer incoming tourists and multiplied several times, the effect ... is quite big for Bali's tourism," said Alwi Bariya, vice chairman of the Bali chapter of the Indonesian Tourism Association (ITA).

I Gede Wiratha, who heads the Bali chapter of the Indonesian Chamber of Commerce and Industry and is also Wiranatha's brother, said the recent series of calamaties that have befallen Indonesia had undercut tourism.

Since the nighclub bombings in Bali in 2002 that killed 202 people, mostly foreign tourists, Indonesia has had to deal with the 2004 Boxing Day tsunami which devastated northern Sumatra, recurring outbreaks of bird flu and a fresh series of bomb attacks, including Bali again.

"Air Paradise is a casualty, but not the only one, of the series of misfortunes that has hit our country in recent times," Wiratha said.

He expressed pessimism that Bali's 7.7 percent 2005 growth target could be met as 95 percent of its economy is generated by the private sector which in turn is over 80 percent dependent on businesses linked to tourism.

"Bali has no natural resources. It depends largely on tourism," he said.

Bariya said "we are now feeling a drop of some 42 percent in foreign tourist arrivals.

"Just take my company. From an average of 30 to 50 bookings per day ... prior to the bombings, we are now down to about six per day," he said of his travel agency.

He said that while Australian and East Asians were more worried about terrorism, Europeans appeared more fearful of bird flu which has killed at least seven people in Indonesia.

Although he could not immediately give a precise figure, he said that the number of tourists from Australia to Indonesia has fallen "drastically" since the October 1 Bali bombings which killed 20 people plus the three bombers.

"Especially since the video was shown where this hooded terrorist warned that Australia was among their targets for terror, sentiment in Australia is certainly not in favor of visiting Indonesia, including Bali, for the time being," Bariya said.

"With the bird flu and the bombings, it is like we not only fell from a ladder but we were hit by it as well."

In the video seen this month a balaclava-clad man, believed by Vice President Jusuf Kalla to be top wanted terrorist Malaysian Noordin Mohammad Top, threatens Western nations.

The recording was recovered from the bomb-packed hideout of his partner in crime Azahari Husin, who died in a police shootout.

Subroto, Vice President of the Indonesian Tourism Industry Association, conceded the country's tourism industry was facing dire times.

Everyone, and not only the government, "should work hard to restore our good image and remedy ... problems of security and other weaknesses," he said.

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