Garuda Indonesia says it will maintain domestic fares

JAKARTA (JP): National flag carrier Garuda Indonesia will maintain its domestic fares although several other local airlines have announced higher fares.

"It is not timely to raise the domestic fares at present when the buying power of people is still low," Pujobroto, spokesman for state-owned Garuda, said on Wednesday.

He said with the current fares, the airline operator would still be able to cope with the rising operating costs.

At present Garuda's domestic fare for economy class for the Jakarta-Surabaya route is Rp 594,000, Jakarta-Medan Rp 1,049,000, Jakarta-Batam Rp 738,000, Jakarta-Manado Rp 1.701,000, Jakarta- Makassar Rp 1,085,000, Jakarta-Denpasar Rp727,000 and Jakarta- Solo Rp 412,000.

The Indonesian National Air Carriers Association (INACA) announced the rise in the exchange rate standard used by its members to set U.S.dollar-based fares in a range between Rp 5,000 and Rp 9,000 per U.S. dollar, from the previous range of Rp 4,000 to Rp 7,500. The new standard will come into effect in June.

The rise in the exchange rate would pave the way for local airline operators to increase their fares. Most of them have said that their fares had been too low but they could not raise them due to the low exchange rate standard.

Several local airline companies including state-owned Merpati Nusantara said the new exchange rate standard would enable them to raise their domestic fares beginning next month.

Pujobroto said Garuda would maintain its exchange rate reference of Rp 7,500 per U.S. dollar for domestic fares despite the rise in INACA's exchange rate benchmark.

INACA chairman Wahyu Hidayat said earlier that the adjustment of the exchange rate had to be made to curb the rising operating costs resulting from the sharp drop in the value of the rupiah against the U.S. dollar.

"Almost 80 percent of the local carriers' operational costs are paid in U.S. dollars, while their earnings are in rupiah," Wahyu said. (03)