State-owned airline Garuda Indonesia has slashed ticket prices by 20 percent, the company said on Thursday, following a public outcry over high fares and a call by the country’s president for airlines to offer cheaper tickets.
The move applies to all of Garuda’s domestic routes as well as those of its low-cost subsidiaries Citilink, Sriwijaja Air and NAM Air, executives said.
“This is in line with the aspirations of Indonesians, a number of national industry associations and the [wishes of] the president of Indonesia, who wants a reduction in flight prices to support economic growth, especially in the tourism sector,” Garuda chief executive officer Ari Askhara said in a statement.
The price cut would not affect the airline’s income, because it would help to increase the number of passengers, he added in a text message.
Garuda shares fell 2.7 percent on the news, underperforming the broader market.
Indonesian President Joko Widodo, who is seeking re-election in April, asked airlines this week to cut prices to help the hospitality industry boost occupancy rates. There have also been complaints from consumers over a spike in fares.
However, analysts said that political meddling in the aviation sector was misguided and pressure to cut prices could compromise airline safety in a country with a long record of crashes and poor maintenance.
Widodo on Wednesday ordered ministers to recalculate the price of aviation fuel to ease upward pressure on air fares, and called on state energy firm Pertamina to lower its jet fuel prices.
Pertamina did not immediately respond to a request for comment.
Garuda, which reported a modest profit last year after a poor start, is facing stiff competition from market leader Lion Air.
One of Lion’s Boeing Co 737 MAX jets crashed in October last year, killing 189 people.
Lion Air did not immediately respond to a request for comment on whether it planned to cut its prices.
Indonesia AirAsia, an affiliate of AirAsia Bhd, said in a statement that it would not cut prices.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS