INACA downplays discounts given by new airlines<\/p>\n
JAKARTA (JP): The Indonesian National Air Carrier Association
\n(INACA) played down on Wednesday concerns raised by major
\nairlines over big price discounts offered by new airlines.<\/p>\n
INACA chairman Wahyu Hidayat said offering price discounts was
\nsomething normal in the business and the competition is also good
\nfor consumers.<\/p>\n
However, he acknowledged that the way some new airlines' sales
\nagents push customers to change their tickets with the agents'
\nstuff violated business ethics.<\/p>\n
\"But, to reprimand those mischievous travel agents or new
\nairlines is difficult because there is no clear-cut regulation to
\nrefer to and besides many of the new airlines are not INACA
\nmembers,\" he told The Jakarta Post.<\/p>\n
Some existing airlines expressed concern over the fact that
\nnew airlines not only have given big discounts but also allow
\ntheir sales agents to aggressively urge customers of other
\nairlines to exchange their tickets for tickets of the new
\nairlines.<\/p>\n
\"These agents are even ready with a certain amount of cash to
\nbe given to customers who are willing to change their tickets,\"
\nsaid a senior official of Garuda Indonesia.<\/p>\n
The unused tickets are then returned by the agents to their
\ncolleagues who sold them, he said.<\/p>\n
The Garuda official as well as Wahyu said the big discounts
\noffered by new airlines had not significantly affected their
\nmarkets now, but it will certainly pose serious threats if it is
\nnot eliminated.<\/p>\n
Benny Rungkat, the chairman of the association of the air
\ncommerce society (Pauki), also criticized the big price discounts
\noffered by the new airlines.<\/p>\n
He said that the discounts, which often reached 40 percent of
\nthe official rates, would create an unhealthy business climate in
\nthe airline industry.<\/p>\n
\"New airlines are now practicing dumping of their airfares.
\nThat's because they have been so hurried and miscalculated the
\ndemand of the local market,\" he said, adding that INACA as the
\nofficial airline association must reprimand the new airlines.<\/p>\n
New airlines, however, have denied the dumping allegations
\nleveled to them.<\/p>\n
President of Lion Airlines, Rusdi Kirana, said his company had
\nnot slashed its fares.<\/p>\n
\"Cutting the airfares by 35 percent or 40 percent is really
\nabsurd. We don't do that. It will only lead you to financial
\ndisaster,\" he said.<\/p>\n
The domestic air fares are determined by INACA but they should
\ngain approval from the government.<\/p>\n
Meanwhile, AWAIR said it was only giving discounts during the
\npromotion period, which ends this month.<\/p>\n
Indonesia's airline industry has became crowded with the
\nrecent entrance of seven airlines, namely AIRWAGON International
\n(AWAIR), Pelita Air Service, Indonesian Airlines Avi Patria, Bayu
\nIndonesia Air, Lion Mentari Air (Lion Airlines), Rusmindo
\nInternusa Air and Jatayu Air.<\/p>\n
At least three of them, including Lion Airlines and AWAIR,
\nhave began their commercial operations to take advantage of the
\nrecovering local market.<\/p>\n
INACA recently predicted the country's airline industry would
\ncontinue recovering with demand for seats estimated to grow by 10
\npercent this year to reach about 7.5 million passengers from 6.89
\nmillion passengers.<\/p>\n
It also estimated local demand would continue to grow to reach
\n8.27 million passengers next year and swell to over 10.4 million
\npassengers by 2004. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inaca-downplays-discounts-given-by-new-airlines-1447893297",
"image": ""
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