Tuesday, April 22, 2014

Budget Carriers Sip Improving Travel Market by Westhill Consulting Travel and Tours

Indonesian Muhammad Fikri, 28, studying in the Netherlands, bought round-trip tickets from a low-cost airline for his solo trip to Italy this month.

Fikri,  who worked in a social business institution in Jakarta last year, was an avid backpacker exploring Asia on low-cost carriers.

“I don’t have a huge budget, but I do have some money spare to travel abroad,” he said.

Many middle-class Indonesians are using their disposable income for travel and Fikri is one of them.

The Transportation Ministry projected that the total figure of air travelers in the country will be as much or higher than 100 million this year, 11 percent up from 2013’s estimated 93.56 million.

To comply with the towering demand, budget airlines Citilink, Lion Air and AirAsia have all set increase plans for this and the coming years.

The budget airline unit of national flag carrier Garuda Indonesia, Citilink, will receive eight Airbus A320s sometime between June and December this year to make-up international routes.

The carrier currently operates 22 aircraft, last month with a flight from Surabaya, East Java, to Johor Bahru, Malaysia, it has made its international-route debut.

Citilink CEO Arif Wibowo said the carrier would also offer other international flights connecting Surabaya to Kuala Lumpur, Malaysia, early this month and Singapore in May, as well as Hong Kong, Taiwan and Perth, Australia, in the coming months.

It aims to almost double its aircraft to 50 units by 2015 and augment its scheduled domestic and international routes from 28 to 37 this year.

The country’s largest low-cost airline, Lion Air, will focus on adding several domestic routes this year.

“There are still many domestic routes that we haven’t covered yet,” said Lion Group corporate secretary Ade Simanjuntak.

The Lion Group functions low-cost carriers Lion Air and Wings Air, full-service carrier Batik Air, and the low-cost carrier combined ventures Malindo Air and Thai Lion Air in Malaysia and Thailand, correspondingly.

The group transported 36 million passengers, or around 40 percent of the country’s total air travelers last year, according to the Center for Aviation (CAPA). Of the 36 million passengers, 35 million took domestic flights, CAPA estimated.

Lion Air, which serves 36 domestic and international destinations with its 95 aircraft, is slated to open new local routes connecting Balikpapan, East Kalimantan, to Sulawesi cities, like Makassar, Palu and Manado, Ade said.

Currently, the carrier now flies abroad to, among others, Jeddah in Saudi Arabia; Singapore; and Kuala Lumpur and Penang in Malaysia.

Ade said that this year, the group only expected Batik Air, which was launched last May, to start flying to Singapore in November at the earliest.

The long-term plan to add hundreds of aircraft, he said, would still go ahead. The Lion Group has ordered at least 570 aircraft worth US$46 billion from Airbus and Boeing, with delivery up to 2028.

Indonesia AirAsia (IAA), an affiliate of the Malaysia-based AirAsia Group, will focus on international routes this year together with the group, said IAA spokeswoman Audrey Prograstama.

“We are very strong in international flights. The number of air travelers across Southeast Asia increased up by 20 percent in recent years,” she said.

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