Fuel price hike prompts Garuda to raise airfares

JAKARTA (JP): National flag carrier Garuda Indonesia has raised the tariffs of all its domestic flights by an average of 37.7 percent, effective today, to take account of the sharp fuel- price rise and the rupiah's weakening value.

The airline announced yesterday that the fare for Jakarta- Surabaya had risen to Rp 466,000 (about US$58.25) from Rp 236,000, Jakarta-Yogyakarta was now Rp 325,000 from Rp 235,000 and Jakarta-Palembang had risen to Rp 325,000 from Rp 236,000.

The fare from Jakarta to Bali is now Rp 571,000, to Semarang Rp 274,000, to Biak Rp 1.75 million and to Medan Rp 824,000.

The tariffs apply only for economy class seats.

The rise followed Monday's government announcement hiking fuel prices. Jet fuel now costs Rp 600, up from Rp 420 per litter.

Garuda president Soepandi said yesterday the airline's set basic tariffs remained at 4 U.S. cents per seat per kilometer, but the exchange rate had now been adjusted to Rp 5,500 per U.S. dollar.

Garuda's operating costs are 8 U.S. cents per seat per kilometer, Soepandi said.

"We still need more to be able to continue operating, but we cannot really raise prices any more than this," he said.

The currency crisis has weakened people's purchasing power, and prompted a significant drop in airlines' load factors.

Garuda's load factor has dropped to 60 percent of its pre- crisis level, Soepandi said.

He said the airline was in the process of restructuring to compensate for the loss.

The airline now evaluates its flight schedule more frequently than before, when flight rescheduling was done every six months.

"Now whenever we see a flight route does not have a lot of passengers, we quickly cancel that route or move the flight," he said.

Private airlines grouped in the Indonesian National Air Carriers Association (INACA) also raised their economy-class domestic flight rates by an average of 37 percent effective yesterday.

Association chairman Soelarto Hadisoemarto said the increase was mirroring the fuel-price hike and an adjustment for the rupiah's current exchange rate against the dollar.

INACA last adjusted domestic rates in January, based on an exchange rate of Rp 5,000 per dollar.

The rupiah has sunk by about 70 percent since July to more than Rp 8,000 to the dollar. (das)