Foreign airlines still have confidence in Indonesia

Foreign airlines still have confidence in Indonesia

JAKARTA (JP): The multitude of problems in Indonesia have not
discouraged several foreign airlines from serving the country.

Since the financial crisis hit the country in mid-1997, there
has been a significant decline in both inbound and outbound
flights in Indonesia, especially to Jakarta. Some foreign
airlines have even terminated their service to Indonesia.

Drop in revenue is one reason airlines have decided to
discontinue certain routes. Meanwhile, the number of inbound
passengers to Indonesia will continue to decrease if the country
remains mired in political turmoil, which is sporadically marked
by bloody riots.

Foreign airlines bring in foreign tourists. During the peak
economic period, in late 1996, there were some 30 foreign
airlines serving the country and as a result Indonesia saw
significant tourist arrivals. There are now only half the number
of foreign airlines serving the country.

Among the airlines still flying to Indonesia are Singapore
Airlines and its affiliated SilkAir of the SIA Group.

"Airlines open and close routes based on operating economics,
their view of the future and their commitment to a particular
market. We are certainly committed to the Indonesian market, and
intend to provide the frequency and capacity for businessmen,
tourists and freight forwarders to support the Indonesian
economy," said the general manager of Singapore Airlines in
Indonesia, Raja Segran.

He said both airlines never reduced their flight frequencies
or capacity to Indonesia.

"Indeed, as of last Friday, Singapore Airlines have begun
offering 10 percent more seats compared to the period before the
crisis in 1998. SilkAir too has considerably increased its
capacity to Indonesia, deploying the larger A319 and A320
aircraft," he said.

He said the SIA Group was bullish about the long-term
potential of the Indonesian market.

"The current difficulties do not deter us. During this time of
negative sentiments about Indonesia overseas, the SIA Group has
been promoting Indonesia aggressively all over the world to
restore Indonesia's image, and to assure the traveling public
that there are vast areas in Indonesia that are safe, secure,
charming and waiting to welcome tourists," said Segran.

Asian

The two airlines from Singapore are not alone. Other airlines
from Asia are also confident of Indonesia.

Japan Airlines (JAL), for example, doubled its flights to
Indonesia just when other airlines reduced or stopped their
services to Indonesia. JAL currently operates a daily Osaka-
Denpasar-Jakarta-Osaka route served by DC-10 aircraft, in
addition to a daily Narita-Jakarta-Denpasar route with B-747
aircraft. The expansion is in anticipation of a future increase
in air passengers to and from Indonesia.

Meanwhile, two Asian airlines, Sri Lankan and Philippine
Airlines, resumed flights to Jakarta last December.

Sri Lankan Airlines, which suspended its service to Indonesian
about seven years ago due to aircraft shortage, now links Jakarta
and Colombo via Singapore twice weekly.

A ticketing staffer of Philippine Airlines, Cindy Muliadi,
said the airlines served Jakarta-Manila via Singapore four times
per week.

"So far the load factor is good and the prospects are also
good," she said.

Taiwan's EVA Air has just increased its flights to Indonesia.

EVA Air Indonesia's country manager Makmun Hamsa said this
year the airline had begun operating two direct flights per week
linking Surabaya and Taipei.

"Previously the flights to Surabaya were part of the services
to Denpasar. Now we fly two times directly to Surabaya and five
times directly to Denpasar per week," he said.

The new route could maximize on both passengers and cargo from
Surabaya, he said.

In addition, EVA also links Jakarta and Taipei daily with its
B-747-400 and MD-11 jets, he said.

He said most inbound passengers to Denpasar were
holidaymakers, while most passengers to Jakarta and Surabaya were
on business.

According to Makmun, the company's current load factors to the
three cities in Indonesia were quite promising.

"This is the low season. We are sure the load factors will be
up during the school, summer and year end holidays," he said.

For the United Arab Emirates' airline Emirates, Indonesia will
also remain a potential market.

Emirates's country manager for Indonesia John Rotikan said his
airlines had advantages unmatched by other air carriers.

"Our load factor is so far stable at 76 percent," he said.

Emirates has flights from Dubai to Jakarta, via Colombo and
Singapore, every Sunday, Tuesday and Thursday, using B-777
aircraft.

Destination

Makmun said there are three types of passengers in Asia;
holidaymakers, businesspeople and workers.

Holidaymakers usually go to the U.S. for high-tech
entertainment such as in Disney World, or to Europe to see
classical buildings like the palaces in Britain. People also go
to the U.S. and Europe for business.

"But now more holidaymakers and businesspeople go to the U.S.
as investments from the continent are everywhere," said Makmun.

It is understandable if some airlines from Europe stopped its
services in Asia, including Indonesia.

In 1999, Swiss Air and British Airways suspended their
services to Indonesia due to a continued drop in revenue. In the
same year, Air France slashed its Paris-Singapore-Jakarta flights
to three times per week from six due to Indonesia's prolonged
economic crisis.

Air France now links Jakarta and Paris every Monday, Wednesday
and Saturday using its Boeing B-777 jets. The airlines competes
with two other airlines from Europe, namely KLM of the
Netherlands and Lufthansa of Germany. KLM operates a daily flight
linking Jakarta and Amsterdam via Singapore with B-747-400 jets,
while Lufthansa also operates its Jakarta-Frankfurt route seven
times a week. -- I. Christianto