Airlines' load factor rises, passengers drop
Airlines' load factor rises, passengers drop
JAKARTA (JP): An association has said local airlines had
recorded an increasing load factor this year but the number of
passengers was steadily declining.
President of the Indonesian National Air Carriers Association
(INACA) Soelarto Hadisoemarto said local airlines were currently
operating at an average load factor of 65 percent, higher than
the 40 percent recorded in 1998.
"We can achieve a higher load factor this year mainly because
we are operating with a reduced fleet, but on profitable routes,"
he told The Jakarta Post over the weekend.
Data from the directorate general of air transportation at the
Ministry of Communication says the country's local airlines
operated 93 aircraft by the end of last year, down from 176
aircraft in 1997.
According to the data, the number of airline passengers
dropped by 41 percent to about 7.4 million last year from 12
million in 1997.
The number of passengers was predicted to further decline by
13 percent to 6.5 million by the end of the year.
Soelarto said local airlines had suspended services to
unprofitable destinations and grounded or returned some leased
aircraft to cut maintenance and operational costs.
He said the sharp depreciation of the rupiah against the U.S.
dollar beginning mid-1997 dealt a serious blow to the local
airline industry as their earnings are in rupiah but pay most
costs in dollar.
About 80 percent of the airlines' overhead costs, including
aircraft leasing fees, spare parts and fuel costs, were quoted in
dollars, he added.
State-owned Merpati Nusantara Airlines, which dominates
domestic routes, returned 19 of its leased planes, including
three F-100s, five Airbus-310s, one BAe-146s and 10 F-28s in June
last year to cut mounting operating costs.
The cuts in the fleet have caused its load factor to fall
below 40 percent while its revenues dropped to around Rp 70
billion (US$10.7 million) on average per month.
Merpati's load factor has been improving this year at an
average rate of 70 percent. It now serves at least 270 routes,
including three overseas flights, using 30 aircraft.
Flag carrier Garuda Indonesia sold about five of its Airbus B4
aircraft this year to save its operational budget.
Garuda cut over 40 percent of its international flights,
mostly to destinations in the United States, Europe and Asia, and
about 30 percent of its domestic flights.
Despite toiling to settle $1,8 billion in debts, Garuda has
been doing better this year with its load factor rising to an
average of 80 percent from 60 percent in 1998.
Director general of air transportation Soenarto said another
indication of local airlines' gradual recovery was the reopening
or establishment of new domestic routes, especially in
Indonesia's eastern provinces, by several airlines, especially
Merpati.
"At least three domestic flights to several cities in
Kalimantan and Sumatra were opened this year," he said.
He said several airlines had also increased their fleet,
bringing the national total fleet to 104 from 93.
Soelarto said local airlines were upbeat that they would be
able to maintain the average load factor at 65 percent until the
end of the year.
"There is a possibility that the level will go up to 70
percent," he added. (cst)