Business Policy of National Scheduled Airlines for Sustainability of National Airlines in Indonesia

Abstract

The aviation industry is one of the transportation services that is experiencing rapid growth in line with the development of the global economy and technology. This rapid growth makes the aviation transportation service industry more varied, so that in its sustainability it creates competition between them; especially in terms of price and service competition. In addition to price and service, there is another problem, namely safety which is a determining factor for the sustainability of this aviation transportation business. This study uses a combination of a quantitative approach using Structural Equation Modeling (SEM) and a qualitative approach through in-depth interviews with airlines and regulators. Data analysis used the Analysis of Moment Structures (AMOS) program for hypothesis testing and NVivo for policy analysis. Data comes from primary data through focus group discussions (FGD) and secondary data sources taken from airline financial reports from 2014-2019.Meanwhile, the results of interviews with airlines and regulators processed with the NVivo program indicate that the determination of the lower limit fares must be regulated by the Government (as regulator) so that price predators do not occur. Airlines consider that price competition can sometimes be unhealthy. Safety is also a major factor for airlines for the sustainability of the business itself. Meanwhile, from the regulator's point of view, stating that the world of aviation is largely determined by the level of security and safety of the flight itself; both on the ground and in the air. Various efficiency efforts can be made, but safety and security standards should not be lowered in the slightest. The regulator has controlled the above factors and according to the regulator there needs to be a synergy with all related parties, including the aviation industry itself, the manager, and of course the public's understanding of safety itself.