The Destruction Of Airlines During Prohibition Of Homecoming: Insufficient Cargo Business, Cutting Costs Is A Solution

Airplane illustration. (Photo: Doc. Antara)

JAKARTA - The government's decision to impose a ban on going home from May 6 to May 17 brings its own uncertainty for air transportation service operators. This is because the industrial sector is one of the most affected because of the elimination of annual activities.

Moreover, the aviation business line is known to have very large operational costs, with many of them being private players.

Aviation observer Alvin Lie said that in situations like this, airlines often trick it by focusing on goods delivery services. This effort was taken due to the contraction of aircraft occupancy levels during the pandemic.

"But if you rely solely on the cargo business, the costs will not be sufficient. Especially now that before the holiday period, production activities will automatically decline, ”he told VOI, Tuesday, May 4.

According to Alvin, the revenue contribution from logistics activities has not been able to meet the operational needs of mainstream airlines in business activities. He said that the strategy to optimize the cargo business was carried out as a joint step to survive in the current stressful situation.

Therefore, he sees that the airline industry has little room to make money in the midst of the ban on going home.

"The most likely thing is not to spur business activity, but instead it has to slow down. The point is not how to increase income but how to reduce losses by cutting costs (cost cutting), "he explained.

For information, 20-30 percent of the operating costs of an airline are usually focused on renting or procuring aircraft. Thus, efficient use of the fleet is the key to suppressing the company's budget in order to survive.

On the occasion, Alvin also gave comments regarding the plan to attend the Super Air Jet airline. He revealed that the low cost carrier (LCC) genre airlines could break the bias in the aviation industry due to business pressures.

Alvin considered that there is an opportunity for the domestic aviation industry to continue to develop thanks to the presence of Super Air Jet.

"This could actually develop the LCC market potential because the number of consumers is quite large," he said.