Sudibyo M. Wiradi

Sudibyo M. Wiradi
The Jakarta Post
Jakarta

More domestic airlines fly regional routes

Indonesians wishing to travel to other Asian countries now
have more air carriers to choose from, with several new domestic
airlines entering regional routes.

In addition to established air carriers Garuda Indonesia and
Merpati Nusantara Airlines, other local airlines are now flying
to Asian countries, tapping the growing market in the region.

Lion Air, which initially focused on domestic destinations,
started its Jakarta to Singapore flights twice daily last year.
It also flies to Kuala Lumpur, Malaysia twice daily and to Ho Chi
Minh in Vietnam from Singapore three times daily.

Privately owned Lion Air is among several new airlines that
have survived fierce competition in the market.

The government has issued licenses to at least 25 new airline
carriers to fly the domestic routes since 2000. Several have
already stopped operating, unable to compete.

"Logically, an airline should not be afraid to open new routes
overseas so it can have a wider network," Lion Air public
relations manager Hasyim Arsal said.

If everything ran to plan, Lion would also fly to India;
Guangzhou, China; Hong Kong; Korea; Japan and Australia this
year, Hasyim said.

Other privately owned airlines spreading their wings to Asian
destinations include Batavia and Star Air. Batavia Air currently
flies from Jakarta to three destinations -- Pontianak; to Kuching
in Malaysia; and to Guangzhou in China, daily. It is now
preparing to fly to the Australian city of Perth.

Another new airline carrier, Star Air, is also preparing
inaugural flights to neighboring countries. "We will announce
(the destinations) when they are fixed," Star Air public
relation manager Nurwulan Handayani said.

Meanwhile, state-owned airlines Garuda Indonesia and Merpati
Nusantara Airlines also plan to further strengthen their presence
in the region.

Indonesian flag carrier Garuda Indonesia is expanding its
services in Asian countries, especially to China, and to the
Middle East.

Several routes closed due to the economic crisis in 1997 have
reopened, including Saigon in Vietnam, and China's Shang Hai and
Guangzhou cities.

Garuda already flies to several Asian destinations, including
Jakarta to Singapore and Batam; Yogyakarta to Kuala Lumpur;
Singapore to Semarang; Yogyakarta to Singapore; Jakarta to
Singapore, Saigon; and Jakarta to Beijing.

"We've also increased our flight frequency to other Asian
destinations, including Guangzhou and Shanghai," Garuda's
Pujobroto said.

Other established players in the region are Singapore Airlines
(SIA), Malaysia Airlines, Thai Airways, Eva Air, China Airlines
and Southern China airlines.

While they are competing with well-established local and
international airlines, newcomers say they have had a good
response from the passenger market.

For the lucrative Jakarta to Singapore route, Lion Air
competes with giants Garuda and SIA. Despite its newness, Lion
Air claims its planes are on average 80 percent full on the
route.

Its service has been accepted thanks to its cheaper fares. The
airline's return ticket for Jakarta to Singapore sells for US$89,
compared to $300 charged by SIA and $125 by Garuda.

"Pricing an important element Asian passengers take into
account. Therefore, we try to offer low fares to enable us to
compete. But it does not mean that we offer lower fares at the
expense of safety, service and punctuality," Hasyim said.

Lion was able offer cheaper tickets because of tight
efficiency measures, he said.

Lion Air operates fleets with more seating capacity, compared
to those operated by its competitors. While most airlines use
Boeing series aircraft like B737-200 or B737-400 with an average
of 100 seats, Lion Air operate McDonnell Douglas (MD)-82s with
160 seats. "With larger seating capacity, Lion Air can fly more
passengers than its competitors on every flight," he said, adding
the leasing price of the Boeing and MD planes were almost
comparable.

Meanwhile, to compete with Malaysia Airlines for its Pontianak
to Kuching route, Batavia Air operates Fokker 28 aircraft with 85
seats. "We feel superior with Fokker 28s because our competitor
uses smaller planes," a Batavia Air spokesman said. "With an 85-
seat capacity, our air carrier has a load factor of 90 percent
for the route."

Again low fares count. Batavia Air's two-way ticket (valid
for one-month) for its Jakarta to Guangzhou, China sells for only
$220 compared to the over $300 fare offered by other foreign
airlines.

Although the new airlines generally operate leased aircraft,
they must meet safety standards issued by domestic regulator the
Ministry of Transportation and international organizations like
the Federation of Aviation Administration (FAA).

"Leased aircraft should first pass a rigorous checkup by a
pilot and a technical checkup undertaken by insurance companies
before becoming operational," the spokesman said.

"An airline requires a huge investment and therefore the
airline company is very concerned about safety issues."

For Garuda Indonesia, the low fares trend represents a new
challenge. But to win competition at regional level, the operator
places 'service' -- not fares -- as its top priority.

Garuda Indonesia's head of communication Pujobroto is firm in
his belief that providing good quality service is the best way to
face competition.

"Fare issues in regional markets are 'relative' because the
primary need as far as the market is concerned is 'service',
either pre, or post-flight," he said.