TEMPO.CO, Jakarta - As CEO and former finance director at Garuda Indonesia, I Gusti Ngurah Askhara Danadiputra has a good idea on how to improve the company's finances, which had been in ruins for years.
One month in as president director, Askhara—or Ari for short—decided to raise ticket prices. This move, which came in October, at the same time as the high season for travels, influenced other airlines to also raise their prices. This led to the industry being accused of cartel practices.
In an interview with Tempo, Askhara—or Ari for short—also said that each of the Garuda Group's airline offers different products—Garuda full service, Sriwijaya medium, Citilink LCC. For years, Garuda has had problems with jet fuel and currencies and the people had not realized how low the prices they offer had been. In the past, Garuda stuck with cheap fares in a bid to reach a wider market. But now, the airline will review margins before each flight, and seek for what's profitable.
Ari referred to Singapore Airlines, whose tickets are known to be expensive and yet people still fly with them. Now, he said, Garuda focus on selling a brand. High prices, he added, is also a way to compete in the international flight segment.
"We can hand-over domestic routes to Citilink and Sriwijaya," he said.
To the cartel accusation, Ari said there is none; and he explained this repeatedly to the KPPU. He saw that among LCC there have always been price wars. But in all classes of Indonesia's airlines—prices have been below normal in the past. Regarding whether a cartel exists or not, he leaves it to the KPPU (*)
The full interview is available at koran.tempo.co