Garuda Indonesia Lowers Fares At Request Of Indonesian President

By: Ben Schlappig

Published: February 16, 2019

16 comments

You’ve gotta love some good election year meddling from the government…

Garuda Indonesia has announced that they’ll be cutting domestic ticket prices by 20%. This follows a request from Indonesian president Joko Widodo, who asked the airline to cut fares to help the hospitality industry improve their occupancy rates.

Also worth noting, but I’m sure completely unrelated, is that the president is up for re-election in April, just a couple of months from now. 😉

These ticket price reductions apply for flights on Garuda Indonesia, Citilink Indonesia, Sriwijaya Air, and NAM Air.

Garuda Indonesia’s CEO had the following to say regarding the fare reductions:

“This is in line with the aspirations of Indonesians, a number of national industry associations, and the (wishes of) the president of Indonesia, who wants a reduction in flight prices to support economic growth, especially in the tourism sector.”

Rather conveniently, Garuda Indonesia’s CEO also suggests that the 20% reduction in ticket prices won’t impact the airline’s income, as this move will increase ticket numbers. If the correlation is that direct, you’d think they may have reduced prices a bit earlier.

Indonesia has seen a huge spike in the number of people traveling. The reason I find this outcry a bit misguided on the surface is that there’s actually a fair bit of competition within the country, as both Lion Air and AirAsia have a significant presence there, and their fares are generally quite low. So it’s not like consumers don’t have choice.

Then again, as much as I love the frontline employees, I’ve never really understood Garuda Indonesia’s management team. Last September they sacked the previous CEO, who was improving things at the airline, and replaced him with the CEO of another state owned company. The new CEO’s priority?

“The leadership must face the turbulent economic conditions, starting from the depreciated rupiah to rising oil prices. The main focus of the new management is … an increase in employee happiness. Because making the employees happy will improve customer service.”

An interesting airline indeed!

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Paul Guest

February 20, 2019, 5:26 pm

Why don’t these price reductions apply to International flights. We visit Bali twice a year from Sydney plus Australians in gerneral were the highest visitors to Bali for years and yet only Air Asia and Jetstar offer cheap flights. Is it perhaps we don’t get a vote in the upcoming elections?

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Frank Doyle Guest

February 18, 2019, 4:09 pm

Correct spelling is Sriwijaya, not Sriwijaja. Regarding where to buy domestic tickets, all these airlines have fully functional english websites. It's no different than buying tickets from american carriers.

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Ron Member

February 18, 2019, 6:26 am

Kevin, Greetings from Bali! I think this "price cut" move is indeed politically motivated. It's a set up all along to frame the current administration as being "sensitive" to the needs and aspirations of the people in an election year while in reality it was the same administration who brokered the takeover of independent Sriwijaya Air by Garuda-owned Citilink to clear the way for a duopoly of LionAir/Garuda in the domestic Indonesian market. People don't seem to realize that it is the LionAir Group that's pulling all the strings in the Indonesian aviation market, stifling competition thru political connection making attempts to secure approvals for new domestic routes almost impossible for any other airlines besides the Garuda/LionAir affiliated airlines

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Kevin Guest

February 17, 2019, 12:19 pm

Lucky, you'd after this article, I think it'd be better if you stay focused on writing trip reports. I'm also from Indonesia and I for one think that there's something really sketchy going on between the two major airlines (Garuda and Lion). Around the end of last year, prices for most domestic tickets increased by 150%, and so after these 20% reduction, we're still looking at double the price of a few months ago. Just to give some perspective, it costs $400 to fly round-trip from Jakarta to Manado (a 3:20 flight) after the 20% reduction now on Garuda or Batik (owned by Lion Group). Compare that to the regularly available $600-700 flights on MEA going to Europe, then you can start seeing that something is still very wrong. Most people here don't see this as a political move, since people would expect the government to do something about the illogical fares. I find it amazing when foreigners become so ignorant as to jumping into conclusions so quickly.

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VT-CIE Diamond

February 16, 2019, 10:58 pm

Is AirAsia a success only in Malaysia and Thailand? I have never heard of any aggressive expansion in Indonesia, the Philippines or India. Lion, Cebu Pacific and IndiGo have the lion's share of the LCC market, and AirAsia struggles in those countries, but in Thailand, Nok Air and Thai Lion have never been able to get the better of AirAsia.

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