SIA expects lower traffic on Indonesian route
SIA expects lower traffic on Indonesian route
JAKARTA (JP): Singapore Airlines (SIA) expects a decline in
the number of passengers in its Indonesian service this year as
foreign tourists continue to skip the country as a holiday
destination.
SIA general manager to Indonesia Raja Segran said on Monday
that its passenger load factor for the Singapore-Jakarta route
for the first two months of the year dropped to an average of 65
percent from between 70 percent to 72 percent in 2000.
"Traffic to Indonesia is a bit weak at the moment because of
uncertainties in the country. News coming out of Indonesia isn't
very good," he told The Jakarta Post, adding that travel
advisories issued by countries such as the United States, Japan
and Taiwan had affected people's decisions of entering the
country.
Segran said that travel advisory statements had even affected
traffic to Bali, which he said, had been known as a safe tourist
destination in the country.
"If people see that there is a travel advisory statement for
Indonesia, Bali suffers as well. So there are a lot of concerns
among our colleagues in Bali about the effects of travel
advisories on tourism interests," he said.
Segran said that in the short term the airline is not likely
to increase its services to Indonesia although the airline,
according to bilateral agreements with Indonesia, is still able
to.
"Unless of course, there is an increase in demand, which in
the short term we don't see," he added.
However, Segran said that the airline, which reduced its
flights from Singapore to Jakarta in 1998 due to a plunge in
demand, would continue to maintain existing flights.
In the heat of the crisis, SIA cut down its flights to Jakarta
to seven times a day from the previous eight times due to a lack
of demand. It was shifted back to eight times a day in October
1999.
About the growing competition in the Indonesian aviation
industry, Segran said that the entrance of local airlines
operating on the same routes, would not become a threat to its
Indonesian services.
"Although there will be some loss of market share what we hope
is that new carriers entering the market will actually stimulate
more traffic," he said, adding that competition is good to
encourage operators to improve their services.
Singapore Airlines operates direct flights between Singapore
and Jakarta, Surabaya, Denpasar.
The low demand had also affected SIA's subsidiary Silk Air,
which flies from Singapore to the Indonesian cities of Manado,
Solo, Lombok, Balikpapan, Makassar, Padang, and Medan.
Silk Air operated at a loss in its Indonesian services, Segran
said.
"Many of these routes are not making money, and we are just
providing and promoting the services in the expectation that
traffic will increase in the future," he said.
Segran said that despite the loss, Silk Air will increase its
flights to Manado in North Sulawesi to three times a week from
the previous two times, and from Singapore to Lombok to seven
times a week from the previous four times, he said.
"By doing this we are hoping to provide capacity before
demand," Segran said, adding that he believed that when
conditions have improved, Indonesia will be an attractive tourist
destination.
Segran said that although the amount of passenger traffic to
and from Singapore has suffered during and after the crisis in
1998, cargo traffic has shown an increase.
"On the contrary, the cargo business has been growing
consistently stronger for the last four to five years by between
15 percent to 16 percent a year," he said.
The weakening of the rupiah against the dollar has encouraged
Indonesia's non-oil exports such as tuna fish, fresh fish, and
vegetables.
He said that, in fact, the airline has added a Boeing 747
freighter to its Indonesian services, especially in order to
handle cargo, aside from its usual passenger-cargo configuration.
SIA carries an average of 100 tons of cargo a day, with
between 50 percent to 60 percent comprising of perishable
commodities, Segran said. (tnt)