Asita raises $20m from savings scheme
Asita raises $20m from savings scheme
JAKARTA (JP): The Association of Indonesian Tour and Travel Agencies (Asita) collected some Rp 43 billion (US$19.54 million) as of last January from its "Plan Save 5" program, an arrangement aimed at limiting discounted airfares for international flights.
Asita's chairman, Sri Mulyono Herlambang, told journalists on Saturday that Asita had contributed 50 percent of the interest on the funds, totaling $212,489, to the Indonesian Tourism Promotion Board.
Plan Save 5, which has been boycotted by at least by 24 major travel agencies, requires tour and travel agencies to deposit five percentage points of the nine-percent commission they receive from airlines in state-owned Bank Bumi Daya.
After two years, the agencies can withdraw their funds, but 50 percent of the interest on their deposits should be contributed to the tourism promotion board.
The scheme, which took effect on March 1, 1994, will not allow tour and travel agencies to provide discounts of more than seven percent of the published prices of tickets for international flights.
Heavy competition had previously forced tour and travel agencies to offer discounts of seven to eight percentage points of their commissions to costumers, leaving them with a mere one to two percentage points in profits.
Mulyono noted that Plan Save 5 has been effective in minimizing discounting wars. A number of countries, including Singapore and the Philippines, will likely adopt such a scheme.
"Not only that, the International Air Transport Association will most likely adopt such a scheme for its authorized agents in a number of Latin American countries," Mulyono said.
Domestic
Asita's vice chairman, Indra K. Mahyudin, said the association has signed an agreement with the Indonesia National Air Carriers Association (Inaca) on the implementation of a similar scheme to curb discounting of domestic airfares.
Asita groups some 1,600 tour and travel operators in the country, while Inaca comprises six air carriers, which are Garuda Indonesia, Merpati Nusantara Airlines, Mandala Airlines, Sempati Air, Bouraq Airlines and Dirgantara Air.
Indra said the two associations have agreed to limit the commissions for domestic flight tickets at seven percent, of which two percentage points should be deposited in a designated bank. "So, we might call it Plan Save 2."
He said that Asita and Inaca have not yet implemented the agreement because "the government is still launching its campaign against a discounting war. Just wait and see whether we need to implement it or not." (rid)