As the Indonesian government announces that three of the state-owned airlines will be merged, travel lovers are questioning whether the move will help decrease flight tickets to and from Bali.
The government is seeking to merge Garuda Indonesia, Citilink, and Pelita Air to reduce logistical running costs.
Speaking to reporters this week, the Minister of State-Owned Enterprises, Erick Thohir, outlined why the government plans to merge Garuda Indonesia, Citilink, and Pelita Air.
He revealed that the Ministry of State-Owned Enterprises “continues to reduce logistics costs—Pelindo from four companies into one. Previously, logistics costs reached 23 percent; now, it is 11 percent. We are also trying to merge Pelita Air, Citilink, and Garuda to reduce costs.”
Despite speculation that the merger may, in the long term, help reduce flight costs across the board, Aviation expert Alvin Lie shared with reporters why that may not be the case.
He shared openly and directly that the merger will not reduce airplane tickets, largely due to the three airlines targeting three different demographics and flight routes.
Generally speaking, Garuda Indonesia has targeted high-budget travelers, those who seek full-service airlines.
Whereas Citilink has traditionally targeted mid-budget consumers in both the domestic and international market, and Pelita Air has targeted low-budget travelers with a stronger focus on domestic services.
In fact, Lie expressed fears that the merger won’t decrease flight costs for travelers but risks increasing costs and inefficiencies for the airlines.
An issue that will invariably have a knock-on effect for travelers. Lie said, “Can [this] make flight fares more affordable? No. Instead, I’m worried it will be inefficient.”
He shared, “Logistics costs are not only transportation costs. Warehousing costs, cargo terminals, loading and unloading costs, cargo agent service fees, EMKL/EMKU, and so on, how about that? It’s useless to [to try and] control airplane ticket prices, [if] airport fees keep going up, and out of control.”
So what will the merger of Garuda Indonesia, Citilink, and Pelita Air mean for tourists planning their trips to Bali?
From a passenger perspective, the merger will have no impact on flight services or quality of experience.
At present, there are no public plans to merge the booking platforms or customer services of the three airlines.
The merger, in its most simple form, is a business move. However, if Lie’s predictions come true, ticket prices across the three airlines may change once the merger is complete.
Garuda Indonesia is the country’s national airline and is the airline of choice for thousands of Bali-bound travelers every month.
Earlier this year, Garuda Indonesia increased its flight services from Australia to Bali in light of ever-increasing demand. Tourists from Australia remain the most frequent international arrivals in Bali.
Garuda Indonesia now flies to and from the Island of the Gods four times a week. The GA715 flight service departs from Sydney International Airport at 10.05 am every Thursday, Friday, Saturday, and Sunday.
The homeward flight departs from Denpasar every Wednesday, Thursday, and Saturday, and Sunday at 11.40 pm, landing in Sydney at 7.25 am the following morning.
Due to high demand, Garuda also increased the flight frequency for its Bali-Melbourne route. Since early April, the route has been operating twice weekly, every Friday and Saturday.
Citilink now flies daily between Perth and Bali, giving holidaymakers even more choice and plenty of good flight deals to entice them back to the Island of the Gods.
Management at Bali Airport has confirmed that as demand for travel on the island grows, teams are constantly working behind the scenes to bring more flight services to passengers.
Speaking in early August, the General Manager of Bali Airport, Handy Heryudhitiawan, said, “We are intensively coordinating with relevant stakeholders in order to open new routes to Bali.
He added, “We are optimistic that we can provide services to 20 million passengers in 2023.”
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