Pelita Air to add aircraft, revive scheduled services

The Jakarta Post, Jakarta

Pelita Air Service, which mostly serves the charter aircraft market, plans to add between 10 and 20 new planes to its fleet this year to meet growing demand.

"We are aiming to operate both charter and regular flights for high-end and business-class passengers," said the firm's president, Samudra Sukardi.

Samudra told The Jakarta Post on Thursday that the company needed to operate at least 100 aircraft to be profitable.

Pelita Air, which is owned by state-owned oil company Pertamina, has 42 aircraft in its fleet consisting of 21 helicopters and 21 fixed-wing aircraft. However, it currently operates only 35 of the aircraft, while the rest are grounded.

The company focuses on charter services, with a captive market in the form of oil and mining companies, and enjoys a 45 percent market share. It also serves provides other services, depending on the clients, such as umroh pilgrimages and transporting workers.

"We would like to grow as big as possible," Samudra said.

Samudra noted that Pelita, which was established in 1970 to serve customers working for oil companies, started to fly scheduled services four years ago following the emergence of new low-cost carriers in early 2000.

However, he said that Pelita's scheduled services had been temporarily discontinued following the fuel price hikes late last year.

He said that Pelita intended to start up its scheduled services again to such destinations as Medan, Balikpapan and Singapore.

Samudra, appointed Pelita's president four months ago, said there were some obstacles that the company had to overcome, such as the company's lack of profitability, aging fleet, low motivation among its staff resources and inadequate cash flow.

"We are trying to turn this dire situation around," he said. "Our strategy is to secure our main business -- charter flights -- and then create a new businesses, such as feeder and cargo services."

Samudra, who previously worked for Garuda for 29 years, said that with the expansion plan, Pelita could utilize its surplus staff to work on the new businesses. The airline currently employs about 1,000 people.

To lay off Pelita's employees would be an unpopular choice, he noted. Samudra said, "Pelita is aiming to opt for the other way, which is to expand our business by redeveloping regular routes and creating new businesses."

Samudra noted that in order for the firm to survive, it either had to grow bigger -- targeting a specific market segment -- or offer low ticket prices to its customers.

"For example, American Airlines can survive because of its big size and Southwest Airlines because of cheap tickets," he said, adding that an airline company that was neither big nor small could not operate efficiently. (03)