Garuda to raise domestic fares
Garuda to raise domestic fares
The Jakarta Post, Jakarta
National flag carrier PT Garuda Indonesia plans to increase its
domestic airfares for the second time this year due to the rising
cost of aviation fuels -- avigas and avtur.
"We will have to raise our fares again as aviation fuel prices
are continuing to rise," Garuda President Director Emirsyah Satar
said on Tuesday.
He said the cost of aviation fuel accounted for between 30
percent and 35 percent of Garuda's total operating costs. "We are
now evaluating which routes will be affected by the fare
increases," he said.
Last month, Garuda, which flies to 21 domestic and 23
international destinations, increased domestic ticket prices by
an average of 10 percent, including fares on the Jakarta-Denpasar
route.
Emirsyah also said that his company restructuring its routes
by stopping flights to some destinations and increasing flight
frequencies to other cities.
The planned fare increase is apparently aimed at reducing the
company's likely operating loss for this year.
Garuda has reported a possible operating loss of between US$10
million and $20 million this year due to high aviation fuel
prices.
Besides reducing the possible loss, the airline says it will
also strive to increase revenue.
Emirsyah said that Garuda's new joint venture,
Lufthansa Systems Indonesia, was expected to help increase its
revenue by between approximately 3 percent and 5 percent.
The new venture -- established jointly by Garuda and Lufthansa
Systems of Germany -- started up on Tuesday. It specializes in
software development and providing high-quality data center
services for regional customers. Applications focus on solutions
for various distribution channels, customer loyalty programs,
corporate revenue management solutions and integrated on-board
processes.
The joint venture is 51 percent owned by Garuda and 49 percent
by Lufthansa Systems. Lufthansa Systems is a wholly owned
subsidiary of the Lufthansa Group, and provides information
technology (IT) services to the airline and aviation industries
worldwide.
Lufthansa Systems Chief Executive Officer Wolfgang F.W. Gohde
told reporters that his company and Garuda would combine their
efforts to develop the IT solutions market for the aviation
industry in Southeast Asia.
"The solutions will not only give Garuda an increase in
revenue of at least 3 percent, but also develop its national as
well as regional markets," said Emirsyah.
He said the application of the IT solutions would also help
Garuda roll out electronic ticketing (e-ticketing).
The International Air Transport Association (IATA) has ruled
that the end of 2007 is the final deadline for airlines to have
begun applying e-ticketing.
E-ticketing enables air carriers to reduce
booking expenses by eliminating the need for printing and mailing
paper documents and prevents any possibility of loosing critical
documents. (001)