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)