Low cost carrier Indonesia AirAsia, the Indonesian unit of Malaysia's AirAsia, carried 4.08 million air passengers in the first half of 2014, a growth of 12 percent from the same period last year (3.64 million passengers). However, this growth figure failed to achieve the company’s initial target as it had to reduce flights and routes in an effort to cut back on expenses amid high operational costs. Although the firm managed to pass on part of expensive fuel costs to passengers (fuel surcharge), operational costs for specific routes are high.
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Today's Headlines Indonesia AirAsia
Ticket sales of domestic low-cost carriers in Indonesia have declined up to 20 percent after the Transportation Ministry implemented new (higher) surcharge fees for airline tickets on 26 February 2014. The new fuel surcharge was needed to offset the negative influence of sharp rupiah depreciation in 2013, which led to rising jet fuel prices, as well as low passenger rates amid the current low season. The Indonesia National Air Carrier Association (INACA) had previously requested for the new surcharge as Indonesia's aviation industry was in jeopardy.
Indonesia Investments uploaded the company profile of Indonesia AirAsia in the Indonesian Companies section. Indonesia AirAsia, unit of Malaysia's AirAsia, is a private company that engages in low-budget airline services in Indonesia. Although small compared to Lion Air (the dominating force in Indonesia's low cost segment), Indonesia AirAsia posts good growth in the region's most prospective air travel market. In the second quarter of 2013, its total number of passengers increased 33 percent (yoy) to 1.92 million people.
Citilink Indonesia, the low-budget unit of Garuda Indonesia, announced its intention to conduct an initial public offering (IPO) in 2015 by offering 30 percent of its stocks to the public. The Indonesian budget airline also plans to expand its fleet-size to 50 airplanes. However, before an IPO can be conducted, the company said it should improve its (financial) performance first. In 2012, Citilink Indonesia recorded an USD $28.4 million loss on operating revenues of USD $73.4 million.
Citilink Indonesia, the low budget carrier of national airline Garuda Indonesia, expects to transport around 7.8 million air passengers in 2013. This constitutes a sharp rise compared to last year's result of 3.8 million passengers. The airline, which handles 140 flights per day to 22 Indonesian cities, expects the increase to be in line with the growth of its armada to 29 aircrafts in 2013 (including 22 new Airbus A320 planes). These types of aircrafts are designed to serve short or middle-long distance flights.
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While Indonesia is still mourning for the lives that were lost in the military plane crash in Medan (North Sumatra) on Tuesday (30/06), the Indonesian Transportation Ministry threatens to suspend operating permits of 13 Indonesian airlines that are being plagued by negative equity, raising concerns about these airlines’ safety practices. The Transportation Ministry reviewed audited financial reports of 60 local carriers. These airlines will have time until 31 July 2015 to adjust their balance sheets.
One of the industries that has been showing remarkable growth in recent years in Indonesia is the aviation industry. Blessed with robust macro economic growth and a burgeoning middle class, the country's population is increasingly using airplanes as means of transportation. Considering the magnitude of Indonesia, its island rich composition and underdeveloped road and rail network, air travel is an efficient option.
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