Airlines use gimmicks to lure more passengers
By I. Christianto
JAKARTA (JP): Several overseas airlines serving Indonesia have launched gimmicks ranging from price discounts to special packages to attract passengers in the dwindling market.
EVA Air, Singapore Airlines, Air France, Qantas and Ansett, for example, have cut their fares by some 50 percent in particular periods.
British Airways, German Lufthansa and KLM of the Netherlands refused to comment on their latest fares but analysts say they will have to follow the trend if they want to survive.
EVA Air spokeswoman, Diana Mawarsari, told The Jakarta Post over the weekend that the airline had offered for the first time new tickets with special prices to the United States with one- month or six-month validity periods.
The price could be up to or more than 20 percent lower than normal rates, she added.
"We also offered special rates for tour groups and individual travelers from Nov. 1 to Dec. 12. This was quite helpful to encourage more passengers to choose our flights."
She said that during the Sept. 15 to Dec. 12 period there were also special packages to Los Angeles for a group of at least 10 members for just $999, much cheaper than the original fare of $1,099.
EVA Air will operate an additional flight linking Kaohsiung and Jakarta beginning Jan. 1, 1998.
Top executive of Air France in Indonesia, Christian Herpin, said that Air France had also launched special rates.
"To serve our clientele and to keep our market, we offer reduced fares to Europe," he said, adding that starting early last month until mid this month, individual travelers could fly Air France from Jakarta to a destination in Western Europe for just US$900 instead of the normal rate of $1,450.
The fall in the rupiah's value of about 40 percent since early July has made overseas traveling more expensive for Indonesians.
But this is not the only reason for the dwindling air transport business in the country.
The haze problem, which recently blanketed most parts of Kalimantan, Sumatra and neighboring Singapore and Malaysia has also contributed to the fall in the number of inbound passengers.
Foreign tourists fear that the choking haze is still affecting air traffic and tourist resorts.
Top executive of Cathay Pacific in Indonesia, Clement Lam, agreed that the financial crisis and haze problem had affected business.
Tan Chick Quee, the top executive of Singapore Airlines in Indonesia, agreed.
"The situation is unstable and we should keep our heads so as not to lose confidence, and avoid taking steps that would have long term impact," he said.
Singapore Airlines offered a $900 Jakarta to London flight instead of the normal $1,425 fare.
Cathay Pacific has just introduced a fare of $666 for two people to Hong Kong, instead of the normal rate of $600 per person.
The cuts in fares launched by the Asian and European airlines provoked Australia's airlines to follow suit. Although Ansett International and Qantas say they have not been seriously affected by the currency crisis.
Con Korfiatis of Ansett and Ronny Mampouw of Qantas said their airlines cut the price of a Jakarta-Sydney-Jakarta ticket from about $600 to $700 to only $350 effective only in November.
Most of the gimmicks launched by the Asian, Australian and European air carriers will end mid this month because December is usually a peak season.
The international air carriers admitted that the ongoing currency turmoil had affected their revenues due to the decreasing number of passengers in recent months.
They said that situation in Indonesia in 1998 would greatly depend on the stability of rupiah.
"Our load factors reached 80 percent and 75 percent in the Jakarta and Surabaya outbound services respectively in August 1997, much higher than 65 percent and 60 percent respectively in August last year," Diana said.
"But the figures dropped to 60 percent on average in September 1997, much less than 68 percent (Jakarta) and 70 percent (Surabaya) in September 1996."
The Taiwan-based EVA Air currently links Indonesia (Jakarta and Surabaya) and Taiwan (Kaohsiung and Taipei) 10 times per week.
Diana said that the October load factor figures dropped to 45 percent in Jakarta and 40 percent in Surabaya, while in October 1996 the load factor was 70 percent on average.
The economic slowdown has affected air transportation throughout the Asia Pacific region, which claims the strongest air traffic growth rates in the world -- over 7 percent per annum.
Herpin told the Post that Air France had also seen fewer passengers flying from Indonesia to Europe.
Ansett and Qantas have seen stable load factors.
"In the last three months the outbound passengers to Australia were relatively okay," Korfiatis of Ansett said.
He said that total of passengers flying from Indonesia to Australia by Ansett during the January to October period this year was up 11.7 percent over the same period last year.
Ansett's total passengers from Australia to Indonesia during the January-October period this year was up 9 percent over the same period last year, he added.
"Because Australia is quite close to Indonesia, meaning the airfares are not as expensive as rates to Europe or the U.S.," he said.