Minister of Transport: Garuda-Sriwijaya KSO can reduce the tariff war



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Minister of Transport: Garuda-Sriwijaya KSO can reduce the tariff war
Friday, November 16, 2018 | 9:45

[JAKARTA] The Transport Minister (Menhub), Budi Karya Sumadi, is optimistic that the takeover of Sriwijaya Air Group's Garuda Indonesia Operational Exchange, which takes place in the form of joint operations (KSO) between Citilink, Sriwijaya and Nam Air, reduces the tariff war in the airline industry services in the country.

"Sriwijia's cooperation with Garuda (Citilink's parent company) I think is a good effort. This synergies the ability, so there is no tariff war of competition," said Budi Karya in Jakarta on Thursday (11/15).

By reducing the tariff war, the Minister of Transport hopes to achieve a balance point that can be reached by operators there, so that the full costs can be covered below marginthat is. "So, for example, the car grows, which means that the costs of goods are increasing, but if there is still a tariff war there is a problem. We hope that this tariff war will end, balance certain order costs you cancover but it's still there margin which enables the company to develop, "said the Minister of Transport.

In addition, Budi continued that cooperation between Citilink and Sriwijaya could reduce the accumulation of flight frequencies on the airline, so that they could be transferred to other places that are more needed.

"Redundance the path can be reduced because we need a service elsewhere. In eastern Indonesia there are many airports that they want to visit or serve. We expect all obstacles in the form of prices, services and unification, "explained Budi.

The Minister of Transport will call Sriwijaya and Garuda to discuss the details of the KSO. However, he said that it was not necessary for the KSC to require an approval process.

"The CSO should not be licensed, that is, from B to B (business in business) You can use your own (certification) Citilink or Sriwijaya function. But we want to make sure lead"In Citilink it is still whether it is still individual but financially united," Budi said.

With this cooperation, Budi re-examined the plan to increase the lower limit of passengers in the economy class (TBB). He showed that in the near future there would be no increase in TBB.

"Lower thresholds, I did not say that, but I think less and less I think it's easier to negotiate," he said.

As we reported on 9 November 2018, Citilink, Sriwijaya and Nam Air KSO were signed. Later, the entire business of the Sriwijaya Group, including financial assets, will be managed by the KCO.

Director of PT Garuda Indonesia Ari Askhara said that the objective of the operation is to help Sriwijaya Air Group improve business performance and financial performance, including helping Sriwijaya Air fulfill its obligations or obligations towards third parties, including those in Garuda Indonesia .

Ari added that this cooperation could have a positive impact on the Garuda Indonesia group, including the synergy and expansion of the Citilink Indonesia segment market, network, its capacity and capacity, and accelerate the restructuring of the fulfillment of the obligations of the Sriwijaya Group to one of the affiliated companies Garuda Indonesia.

The CSF, which is entirely managed by Citilink, will immediately perform its tasks after completing the internal processes in each company. This participation may also be increased to the level of the share of the Sriwijaya Group to be settled later. [ID/RS]

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