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Garuda to increase revenue from ancillary businesses to lower ticket prices
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A cargo plane of Garuda Indonesia (Courtesy of/flyawaysimulation.com)
I
n response to recent protest by passengers about high airfares, flag carrier Garuda Indonesia explained that ticket sales contributed the lion’s share of revenue for any airline.
“Ticket sales account for more than 80 percent [of airline revenue],” said Garuda Indonesia president director Ari Askhara in Jakarta on Wednesday, as reported by kompas.com.
Ari said Garuda’s other major source of revenue was the cargo business. In 2018, revenue from cargo increased significantly, in addition to revenue from ticket sales.
“The contribution of ancillary businesses to the total revenue is between 10 and 30 percent, depending on the character of each business,” he said, adding that the ancillary business of Garuda contributed about 15 percent to the company’s total revenue.
He said Garuda had reduced ticket prices following the recent protest, and to compensate for the loss of revenue, Garuda had started to intensify its other business lines.
“For example, we are also developing free on-board wi-fi, providing an advertisement spot businesspeople could use to display their advertisement,” he added.
Previously, the Business Competition Supervisory Commission (KPPU) announced it was investigating alleged price fixing behind the rise in airfares, following protest by dozens of people about high airplane ticket prices.
Senior economist Faisal Basri suspected cartel practices behind the high ticket prices. “It is strange that they could make the prices go up and down together,” he said recently. (bbn)
