Sempati Air to drop voucher system

Sempati Air to drop voucher system

JAKARTA(JP): Sempati Air, one of Indonesia's private airlines,
is to drop its On Time Guarantee program (OTG), a voucher system
introduced in 1991 to assure passengers of the carrier's efforts
to provide on-time schedules.

"The measure has not created an internal self-drive for the
management to offer the public on-time schedules. Moreover, OTG
will not be applicable when the system of endorsable tickets is
applied later this year,"Sempati's president Hasan M. Soedjono
said yesterday.

The endorsable ticket system will allow passengers to fly on
any of the country's six scheduled air carriers on domestic
routes.

He said that passengers were looking for real on-time
schedules from Sempati instead of the vouchers.

Sempati gives OTG vouchers to its passengers for any flight
delayed for more than 26 minutes. The air carrier credits each
minute's delay as worth Rp 2,000, but the maximum compensation
for each passenger on one flight Rp 120,000 for 60 minutes.
Combined with cash payments, passengers could use the non-
cashable vouchers to buy new tickets from Sempati.

The company issues vouchers worth Rp 2.25 billion per month
and receives payment with the vouchers of approximately Rp 1
billion per month.

Hasan said that OTG vouchers would not be issued after March
14, but Sempati would still honor vouchers from customers for the
next six months.

"OTG is Sempati's life and blood. No other air carrier in the
world applies such a program to give assurances for on-time
schedules. But we have to drop it. The OTG fund will then be
allocated for our fleet plan."

However, he admitted that there have been several delays on
Sempati's schedules for a variety of reasons.

"For instance, during the big floods in Jakarta recently,
Sempati could not perform any on-time schedules."

Sempati's current rate of on-time performance with delays of
only up to 10 minutes is 65 percent, with delays of up to 20
minutes 80 percent and with delays of less than 60 minutes at
almost 100 percent, he said.

According to Hasan, the elimination of the OTG is one of the
adjustments Sempati will make to join the planned endorsable
ticketing system.

"We realize that other airlines won't accept any payments for
the endorsable tickets with OTG vouchers," he said.

The six airlines have agreed to issue endorsable tickets for
domestic flights starting this year, in order to prevent an
airfare war.

The agreement was signed last November by executives from
Mandala Airlines, Sempati Air, Garuda Indonesia, Merpati
Nusantara, Bouraq Indonesia and Dirgantara Air Service.

The implementation of the agreement, however, has been delayed
several times from its original starting date of earlier this
year due to many unresolved details, including regulations on
baggage handling, insurance, accounting systems and billing.

Going public

Hasan said yesterday that Sempati, which is preparing an
initial public offering of its shares, would be affected if the
government did not revise domestic airfares this year.

"I believe all domestic airlines will be hurt," he said,
adding that domestic airfares should ideally be raised by 15 to
20 percent.

He also said that Sempati would offer between 15 and 30
percent of its shares to the public and expected to raise about
Rp 200 to 300 billion from the flotation.

Hasan said that Sempati's plan to go public would enliven the
stock market in Indonesia, as the carrier will be the first to
offer its shares to the public.

The eight-year-old Sempati is 25 percent owned by Humpuss
group, a diversified business conglomerate controlled by
President Soeharto's youngest son Hutomo Mandala Putra, 40
percent by PT Tri Usaha Bakti, a holding company of the Armed
Forces and 35 percent by Nusamba Group, chaired by the country's
timber businessman Mohammad (Bob) Hasan.

Sempati currently operates five Fokker 27s, seven Fokker 100s,
eight Boeing 737-200s, two Fokker 70s and three Airbus 300-B4s.
(icn)