Saturday, 25 January 2020 | 13:24 WIB

Sriwijaya Air Set to Close Unprofitable Flight Routes

Sriwijaya Air Set to Close Unprofitable Flight Routes (special)

JAKARTA, NETRALNEWS.COM -- Indonesia-based aviation company Sriwijaya Air says it will stop potentially detrimental routes in an effort to implement cost recovery, coupled with the imposition of upper limit tariff discounts (TBA).

"We will continue to analyze, if this interferes with the company's financial performance, it will be postponed or dismissed first. We are looking for which routes can be replaced," said Sriwijaya Air President Director Joseph Adrian Saul in Jakarta.

Joseph said a number of routes that were detrimental or unable to compete with other airlines, namely Jakarta-Banyuwangi, as well as destinations outside Java, especially to the East, such as Papua and Sulawesi.

"Jakarta-Banyuwangi is not profitable, and so we have closed the route. There are also the remote areas that we are concerned about, outside Java such as Baubau and Papua whichare difficult for flights due to the expensive costs," he said.

He will determine what routes will be closed after the Idul Fitri period is over, because from there it will be seen.

"So if the route had one loss, it could be supported by another route, for example, one route had a profit of IDR 10, and there was a loss of IDR. 3, there would still be a profit of IDR 7.

Joseph said the route cuts were part of the airline's financial efficiency efforts, but he stressed that these efforts did not sacrifice the safety and salary aspects of employees.

He targets that efficiency can save five percent of the airline's total operating costs.

"The most important thing is that the efficiency that we do does not interfere with safety, nor does it disturb the welfare of employees. I hope our costs can go down by five percent," he said.