Wednesday, 19 February 2020

Transportation Minister Wants Garuda to Profit with Cheap TIckets



Mahinda Arkyasa

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  • TEMPO.CO, Jakarta - Transportation Minister Budi Karya Sumadi has met with Director of Indonesian flag carrier PT Garuda Indonesia Irfan Setiaputra and other new directors. Budi expressed his request to members of Garuda Indonesia board of directors to continue to increase revenue.

    "[The company] must profit, so it can be sustainable," Budi said at the Transportation Ministry Office on Friday, January 24, 2020.

    However, Budi also requested Garuda to be able to lower prices in a number of flights. "You can profit, but provides afforabilidty for the people," Budi said.

    Budi suggested three topics to be considered by Garuda. The three suggestions have been discussed previously with State-Owned Enterprise Minister Erick Thohir. The first suggestion was to increase load factor from the current 70 percent to 85 percent by offering discounts ahead of time.

    The second suggestion Budi proposed a cooperation between Garuda Indonesia and hotel chains in the form of tourism packages. The third suggestion Budi proposed was suggesting Garuda to sell cheaper prices for less crowded days.

    In addition to the three suggestions, Budi and Garuda board of directors also discussed the price of jet fuel. Currently, jet fue is the main component that resuted in expensive ticket prices. Since the last few months, the government had promised to expand the involvement of private parties in Indonesia's jet fuel market.

    The purpose is to allow avtur price to be cheaper. However, until today, only PT Pertamina and PT AKR Corporindo provides jet fuel. Questioned about the jet fuel issue, Budi simply replied that "they will held discussions with Pertamina," Budi said.

    Irfan on the other hand, had listened to Minister's Budi suggestions and promised to conduct follow up actions. However, Irfan claimed that he cannot confirm whether the move will lower ticket prices. "We will stody it first," he said.