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Passenger Traffic & Aviation Decline, This is the Business Survival Strategy of PT Angkasa Pura II in the Middle of Pandemic COVID-19

21 Apr 2020

Jakarta - PT Angkasa Pura II (Persero) is undergoing a Business Survival phase in responding to the challenges of the global pandemic COVID-19.

The Business Survival phase itself is the first step before the company goes into the Business Recovery phase, then continues to the Business Sustainability phase. These three phases are part of the Business Continuity Risk mitigation strategy established by PT Angkasa Pura II.

PT Angkasa Pura II President Director Muhammad Awaluddin said that in the Business Survival phase the company's objectives were labor protection, optimizing cash flow, and maintaining financial performance.

"We can achieve this goal through various financial savings, namely reducing operational costs, increasing the efficiency of expenditure items, and eliminating non-productive costs."

Muhammad Awaluddin said the operational cost savings had been running by adjusting the operational patterns of the airport, such as reducing the use of non-priority facilities because the frequency of flights at 19 airports was also reduced. Until January 2020, the average flight was still around 2,169 flights / day, but this month (April 1-21) the average flight dropped to 650 flights / day.

Adjusting these operational patterns can save operational costs by up to 25% to 30%.

"Adjusting operational patterns in addition to saving operational costs by 25-30% can also support the health aspects of workers because we can apply the concept of work from home and register systems and split teams and split projects," explained Muhammad Awaluddin.

"Various savings made today we call Cost Leadership, and can support the company's cash strength or cash position," Muhammad Awaluddin added.

In addition to making savings, PT Angkasa Pura II also runs a number of strategies in the Business Survival phase to retain existing customers and expand business portfolios to secure revenue.

Until the end of this year, the company's revenue is expected to reach around 60% to 70% of the initial target of Rp12.8 trillion.

"Our revenue in this challenging year is expected to reach 60-70% of the initial target, set before the global pandemic COVID-19. The number of airplane passengers is currently declining which has an impact on airline revenue, but we will increase revenue from other sectors such as maximize the use of problem assets such as vacant land, as well as from commercial, retail, and so on. "

"We hope that revenue from cargo management will also be better. Another thing, the Company is also reviewing to diversify its portfolio of subsidiaries through strategic partnerships," Muhammad Awaluddin said.

The Business Survival phase carried out by PT Angkasa Pura II during the spread of COVID-19 is still happening.

PT Angkasa Pura II remains committed to maintaining national air transportation connectivity by prioritizing health, security and safety aspects, as well as trying to maintain the company's financial performance amid the COVID-19 pandemic.