A Garuda Indonesia Airbus A330-200 (Photo: byeangel from Tsingtao, China (Garuda Indonesia Airlines Airbus A330-243 PK-GPI) [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons)
As a result of increased airfare earlier this year, the passenger numbers of Garuda Indonesia Group in the third quarter dropped 2.1 million year-on-year, but the company’s revenue recorded a huge growth.
According to local media, Garuda Indonesia lost one million passengers in the domestic market and the passengers for international flights declined by a hundred thousand. In the meantime, Citilink, Garuda’s low-cost carrier has lost 1.1 million passengers as well. The passenger volume fell 20 percent overall.
In spite of the dropping passenger volume, Garuda’s revenue increased by $1.6 million, Citilink also saw a $2.5 million increase in the third quarter.
According to Reuters, Garuda has slashed 15 percent domestic seat capacity from March to October as the first annual decline in passenger traffic since 2014, in the meantime, the carrier has increased airfare to boost its revenue. In response to the decrease of flight frequencies, Garuda mentioned the airline “wanted to optimize the capacity.”
The aviation market industry in Indonesia is dominated by Garuda and Lion Air. The Indonesian government struggled to set a price ceiling for the market. The pricing system cannot lessen the high airfare in the country.
In response to the public demand, Garuda agreed to offer the lower airfares before Christmas. Also, the airline said that it would review airfares in the future to decide if the discounted ticket would be continued after Christmas.
In the meantime, the state-owned oil company Pertamina cut fuel prices by 20 percent at select airports in Eastern Indonesia until Jan. 31. The company was accused of expensive fuel prices, resulting in the high airfare.
“We are offering an aviation fuel discount to facilitate the transportation of people and support the aviation industry,” a spokesperson for the oil company stated.
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