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AirAsia to enhance RI domestic connectivity

Saying “Indonesia is not just Bali, there are many other interesting destinations”, AirAsia CEO Tony Fernandes has announced the opening of new domestic routes in order to firm up the low-cost carrier’s grip on Indonesia’s domestic air connectivity

Nadya Natahadibrata (The Jakarta Post)
Jakarta
Tue, September 16, 2014

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AirAsia to enhance RI domestic connectivity

Saying '€œIndonesia is not just Bali, there are many other interesting destinations'€, AirAsia CEO Tony Fernandes has announced the opening of new domestic routes in order to firm up the low-cost carrier'€™s grip on Indonesia'€™s domestic air connectivity.

AirAsia Indonesia would open new domestic routes next-month, namely Palembang-Medan and Medan-Yogyakarta, and expects a boost in company revenue.

'€œMy plan in Indonesia is to grow tourism, inbound tourism. And it'€™s not just about Bali,'€ Fernandes said on Monday on the sidelines of the CIMB Niaga AirAsia BIG credit card launch event.

'€œWe want to bring more tourists to Indonesia. This is my big goal in 2015 because it'€™s a great way of creating jobs and creating more economy, more shops, more hotels, more handicrafts and more tour guides,'€ he said.

He added, however, that high passenger service charges at the country'€™s airports had been hampering the airline'€™s growth.

'€œIf [the] airport supports me, I'€™m willing to make the investment in Medan, in Lombok, in Padang, in Ambon. I think Ambon has a lot of potential, but I cannot do it by myself,'€ Fernandes said. '€œIn Bandung, we were lucky. We were the only airline there so we owned it and then everyone copied it. But really, if the airport charge was lower in Bandung, I could do much more. So my goal is to try open new markets so that the rest of the world can see Indonesia is not just about Bali.'€

AirAsia currently holds five hubs in the country, namely Jakarta, Medan, Bandung, Surabaya and Bali, said AirAsia Indonesia president director Sunu Widyatmoko said.

'€œMedan is one of our hubs. AirAsia aims to balance the number of fleets it has in each of its hubs. We will not only develop our hubs in Bali and Jakarta,'€ he added.

Sunu said that the airline, which currently operates 9 domestic routes and 21 international routes, was optimistic it could reach at least 77 percent of the load capacity for the new routes, which are set to be launched in October.

According to Fernandes, the company'€™s strategy over the next few years will be to enhance the country'€™s domestic connectivity in an attempt to boost revenue,

'€œWe will still develop our international routes, but currently we will be focusing more on strengthening our brand in the domestic market,'€ Sunu said.

Sunu declined to disclose the company'€™s revenue target for 2014, but said that the company aimed at increasing the number of passengers from 7.8 million in 2013 to 8 million by the end of this year. Through August, the airline had recorded a total of 5.31 million passengers.

After the launch of the new routes from the airline'€™s Medan hub, AirAsia would also open new domestic routes from Bandung, Surabaya and Bali, Sunu said.

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