British Airways, Swiss Air stop Indonesian services

British Airways, Swiss Air stop Indonesian services

JAKARTA (JP): Swiss Air and British Airways said on Tuesday
they would suspend their Indonesian flights beginning from
November due to a continued drop in revenue.

Swiss Air country manager Irma Purba told The Jakarta Post the
airline decided to suspend its Jakarta flights because revenue
from the route was no longer sufficient to support operational
costs.

"The revenue we obtain from serving Jakarta is not sufficient
to support our operations. The erosion in returns is more than 50
percent," she said.

Swiss Air currently serves its Jakarta route via Singapore
three times a week .

Irma said the decline in the revenue was partly due to the
airline's decision to recently reduce ticket prices to
accommodate the public's diminished buying capacity.

Swiss Air began operations in Jakarta in 1980. It suspended
its service in 1991 amid the restructuring program of its
services in the Far East region. The airline resumed operations
in March last year.

Irma said the airline was not facing any problems with the
load factor for the route.

"The load factor for the route itself is excellent -- on
average recently at between 70 percent and 80 percent. Though
Jakarta contributes 20 percent at the maximum to (that figure),"
she said.

British Airways said the main reason behind its decision to
suspend its Jakarta flights was a decline in the number of
passengers.

"Over the last 18 months, we have reviewed the performance of
the Jakarta route in great detail. Unfortunately, even with the
more promising economic indicators of recent times it is not
possible for British Airways to make a return sufficient to
justify continuation of services at this time," said British
Airways manager for Indonesia Claire Hatton.

"As with other businesses, the less promising economic
conditions over the last few months has affected business
performance. In our case, it has caused a decrease in passenger
demand. This is due to a decrease in traffic to Europe and the
United Kingdom, which are our primary destinations," she said.

British Airways previously had six flights to Jakarta every
week before slashing the flights to two flights in October 1998.

The two airline's flight suspension decision was made despite
a recent optimistic prediction by the Ministry of Tourism, Arts
and Culture of a steady increase in the number of inbound
arrivals this year.

Inbound arrivals through Indonesia's 13 points of entry in the
first half of the year revealed that there was more than a 10
percent increase, or 1.86 million foreign tourists compared to
1.68 visitors in the corresponding period in 1998.

Inbound arrivals to Jakarta however, remained low due to the
unstable political situation. There was an 18.3 percent drop, or
only 606,188 foreign visitors to the capital during the period.

While Bali and Batam maintained their status as the country's
most visited islands, recording an increase of respectively 32.3
percent and 17 percent and welcoming 683,083 and 606,188 visitors
each.

The ministry predicted Indonesia would receive up to 354,150
international tourists in October, 354,500 in November and
404,530 in December.

This year's visitor arrivals are expected to increase to 5
million people, from 3.5 million people in the previous year.

Claire said British Airways would maintain its Jakarta office
and would still serve Indonesian passengers traveling to London
via Singapore and Hong Kong through its alliance partners.

She said the connecting flights from Jakarta to Singapore or
Hong Kong would be served by airline partners -- including Qantas
and Cathay Pacific -- at no additional charge.

She said the airline might resume services "if market
conditions change radically for the better and if returns
increase significantly". (cst)