Corporate strategy of PT. Sempati Air

• Main Author: Sadewo, Agustinus A.
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2258
• Institution: De La Salle University

Global air transport industry growth is projected at 6% to 10% up to year 2000. Growth of 7% was projected for Indonesias air transport industry in particular. The prediction of a relatively unstable political situation in Indonesia could affect industry growth. However because of increasing GDP (7%) and Indonesias potential as a tourist market and experience from some riots in July 1997 that did not affect to much to Indonesian economics as general and particularly in air transport industry, the air transport industry there faces years 1997 to 2000 with optimism. Decreasing of profit relative to sales in 1994 and 1995 caused deceasing most of its profitability ratios. The most critical condition affecting Sempati air is its big liabilities, especially its current liabilities. Repayment could put tremendous pressure to Sempati Air on finances. However, increasing of Sempati retained earning from Rp 24, 976 million in 1994 to 51, 888 million in 1995 is one of the strengths as a reserve fund in facing possibility of deficit situation due to political situation in Indonesia during year 1997 and 1998. According to surveys carried out by SRI (Survey Research Indonesia) in 1995 Sempati is favoured over others domestic airlines, in many aspects that include reservation process, ticketing system, service quality, quality of stewardess, quality of meals, management quality, aircraft quality, and spaciousness of seats. Using of scheduling system can maximize the utilization of its aircraft, enable Sempati to have relatively high seat-kilometres available with fewer aircraft compare to other local airline. Relatively low standard-wages in Indonesia compare to other country is one of its strengths to compete globally. However, Sempati still over reliance on foreign facilities to high cost, especially for maintenance cost.