Garuda Indonesia has recently withdrawn flight routes at a number of airports, including Batam, Jambi, and North Sulawesi following a drop in the number of passengers.
“We have a heavy burden. As a state-owned company, Garuda is not only seeking profit,” said the airline group’s Operational Director, Bambang Adisurya Angkasa.
The airline is mandated to provide flights to remote areas of Indonesia, with its operational costs generally being covered from a cross-subsidy, according to Bambang. In order to fly regularly to areas with low-frequency flights, for instance Jakarta to Nias, an agreement had to be established with the regional government.
“Nias Regency gives us a guarantee and asked us to support local tourism. Now we need to consolidate with regencies to make agreements and stakeholders,” he added.
Garuda Indonesia is also rearranging routes to main destinations, such as Denpasar, Surabaya, and Balikpapan, in a bid to optimise services, boost passenger capacity, and increase the flight slots.
Minister of Transportation Budi Karya Sumadi also said that the route closures were attributable to the high price of jet fuel that had different price benchmarks in each region. Budi Karya promised that he will meet the Minister of State-Owned Enterprises (SOE), Erick Thohir for discussions to rebalance the price of jet fuel to reduce airline costs.
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