Fri, 05 Mar 1999

Lufthansa expects Indonesia to take off

JAKARTA (JP): Lufthansa German Airlines' vice president for Asia and the Pacific Manfred Reimer said here on Thursday that business prospects in Indonesia remained promising despite the current economic crisis.

Reimer said that last year's revenue from the airline's Indonesian operation exceeded expectations and the trend was expected to continue this year.

"We have absolute confidence in Indonesia. We have started this year with revenue 10 percent over our expectations for this country and we will continue to take our opportunities," he said at TECHNOGERMA Jakarta, the German technology fair.

"We will not do stupid things like expand our capacity if we don't think we will make money from it," he added.

Lufthansa's country manager in Indonesia, Carlos Heinemann, said that the airline's load factor in Indonesia was still good despite the crisis.

Heinemann said that the airline's average load factor last year reached over 80 percent and the airline had no plans to cut its flights to Indonesia.

Lufthansa flies from Frankfurt direct to Jakarta four times a week using Boeing 747-400 aircraft. It also has a code-sharing deal with Singapore Airlines to carry Lufthansa passengers from Singapore to Indonesia.

"Our code-sharing agreement with Singapore Air has enabled us to maintain our load factor above 80 percent despite the current economic crisis. This year we expect a 100 percent load factor," he said.

The airline reduced its direct flights to Jakarta from seven flights a week to four and added three code-share flights with Singapore Airlines last year due to the slumping load factor.

"But we will go back to seven flights again as soon as business returns to normal," Reimer said.

Heinemann said Lufthansa suffered a slump in Indonesia in the first semester of last year. The airline's revenue from its Indonesian services was 50 percent lower than in 1997 during the same period because the airline had to lower its fares by 50 percent.

"The business is actually just picking up again but it's not yet back to normal," he said.

The number of German visitors to Bali has risen as more Lufthansa passengers are avoiding Jakarta by flying direct to Bali from Singapore, he said.

He said, however, that a few isolated cases of violence and unrest had misled international travelers into thinking that such occurrences were common throughout the capital.

"Misleading reports have discouraged people from flying to Jakarta. So we are helping to promote Indonesia in Germany because we have a lot of interest here."

Heinemann said that many Indonesians had shifted from first class to economy class and business class because of their lower purchasing power.

"Demand for first class has dropped by about 30 percent while demand for business and economy class has increased significantly," he said.

Reimer said that 1998 was a record year for Lufthansa despite the Asian economic crisis. He said the airline carried 4.5 million passengers in 1998, an increase of 8.8 percent compared to 1997.(gis)