Editorial: Who Can Save Our Struggling Airlines?
Flying on cheap tickets from an explosion of budget airlines, traveling around the archipelago has become part of many Indonesians' lifestyle. Suddenly, everyone — even students and teenagers — from middle-income families, or 15 million households, can afford to travel around the country.
According to government data, domestic tourists from across the nation made 250 million journeys last year alone. Meanwhile, nearly 9 million overseas visitors came to Indonesia in 2013, most of whom also utilized the services of budget airlines offering cheap tickets to parts of Indonesia that were almost impossible to reach before.
However, these positive developments in tourism could potentially be shattered by a series of flight shutdowns from several budget airlines. After state-owned airline operator, Merpati, shut down its operations earlier this week, additional low-cost carriers, including Tigerair Mandala and AirAsia Indonesia have decided to suspend some of their domestic flights citing the rising cost of jet fuel.
Fuel accounts for about half of their operating costs and these budget airlines partially blame the depreciating rupiah for the continuous increase in fuel prices.
While the flight shut-downs are merely sad news for domestic and foreign travelers who wish to journey across the archipelago, they can have a devastating impact on millions of people making a living from tourism across the country. Tourists spent more than Rp 100 trillion ($8.2 billion) in Indonesia last year, helping people in villages and small towns earn a living.
The importance of a healthy airline industry should not be underestimated. The government must step in to help these struggling airlines by pushing for an increase in ticket prices or by negotiating lower prices of jet fuel.
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