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Facing Uncertain Skies

Garuda's Commercial VP, Bachrul Hakim, Interviewed on Metro TV.

(12/22/2003) Interviewed on the English-language program Metro This Morning broadcasted on Metro TV on Friday, December 19, 2003, Garuda Indonesia's (GA) Vice-President of Commercial Affairs, Mr. Bachrul Hakim shared his thoughts on the national airline's operations in uncertain skies over the coming 12 months:

Describing the airline industry as a whole, Mr. Hakim suggested that airlines that will survive are those that can apply efficiency to their operations. To this end, GA has cut back all its marginal and unprofitable routes over the past twelve months focusing its efforts on regional routes in the Asia Pacific.

Commenting on the threatened change in the visa policy, he suggested that despite any pro and con arguments circulating regarding the effects of the policy, the Government needs to be aware of competitive practice in the region. He also said that if the visa-fee at the airport is introduced that change must be not represent an inconvenience to the flying public, calling for any visa fee process to be "easy and uncomplicated."

When asked about Indonesia's first direct election of a President scheduled for 2004, Mr. Hakim said that this was not an issue for Indonesia's domestic passengers who will largely take the election process in stride. While the subject of elections is a somewhat sensitive issue on the international front, the effect of the elections on travel to Indonesia will depend much on how the media portrays the democratic election process in Indonesia.

Discussing market shifts in the Asia-Pacific, Mr. Hakim pointed to the dynamic growth in Chinese and Vietnamese tourism, emphasizing the world-wide perception that these destinations are safe for international visitors. He also pointed out how the success of the economies of these two countries is also creating an unexpectedly buoyant outbound market from these countries.

Mr. Hakim cautioned that the current trend to rush to "low-cost" and "no frill" airlines has to be weighed against whether or not the airlines labeling themselves as such are truly "low cost" or, instead, commercial opportunists "dumping" cheap and non-sustainable fares on the local marketplace. He said that he felt that GA was in a good position to compete with the new airlines because of the Company's improved efficiency and its existing strong domestic network to support its international sectors.