Impact of low cost carrier airlines on tourism development in indonesia

Document Type:Thesis

Subject Area:Sociology

Document 1

Further, a forecast of the future of LCCs given their current growth and significance is provided. The findings indicated that there is a positive correlation between low cost carrier airlines and tourism development in Indonesia. The main impact LCCs have had on operations of air transport include lowering of transport and growth of air traffic. The future of LCCs is predicted to grow and outweigh full service carriers (FSCs). Nonetheless, the government is trying to intervene and stop the price setting schemes as a way of protecting the consumer and the gains made in the tourism sector. Borobudur is an ancient temple built around the 8th century and forms the most culturally significant sites. It is arguably one of UNESCO’s most significant world heritage site owing to its significance in Buddhism.

Sign up to view the full document!

Orang-utans of Borneo come in at position three in Indonesia’s tourist attraction products (Kurniawan, et al. The Gili Islands are considered to be the recent surge in popular beaches rivalling the beaches of Bali as they offer beauty and diving opportunities for domestic and foreign tourists. The Komodo National Park is yet another fascinating UNESCO world heritage site owing to its rich and diverse waters with the highlight for tourists being the Komodo dragons, hiking and canoeing. The country hosts the second largest low cost carrier airline in Southeast Asia. This is Lion Air that doubles up the largest privately managed airline in Indonesia. It is second to AirAsia in the category of low cost carrier in Southeast Asia and also forms the largest airline in Indonesia (Mayer, 2018). The other low cost airlines in Indonesia have grown as tourism grows thereby explaining the cause effect relationship between tourism and low cost carrier airlines.

Sign up to view the full document!

The table below summarises the low cost carrier airlines in Indonesia. Impact of Low Cost Carrier Airlines on Tourism Development At face value, the impact of low cost carriers on tourism development in Indonesia can be deduced from the obvious cause effect relationship between tourism and transport. As transport becomes more affordable, more tourists are able to visit several destinations. Equally, as more people visit various destinations, the transport sector grows by the day. However, the case of Indonesia, despite following the same metrics is somewhat more elaborate. This perhaps can be explained by the fact that in most countries, air transport is used to get in and out of the country but tourists largely prefer water or road transport to be able to have the best interaction with local culture and scenery (Yadav, & Dhingra, 2018).

Sign up to view the full document!

in 2018, which was twice the global average growth rate of 3. This shows how the growth of LCCs have positively impacted tourism in Indonesia. Evidence includes the growth of Tourism contribution to Indonesia’s employment where the industry accounted for 13 million jobs which is 10. of Indonesia’s job market. The expenditure of foreign tourists in Indonesia in 2018 accounted for 6. Future of Low Cost Operations Globally, LCCs are fast replacing FSCs as people become more price conscious. Currently, the rate at which LCCs are replacing FSCs is steady seeing that LCCs has acquired over 30% of the market share. Under the current set up without intervention, LCCs are bound to grow in popularity as global economies slow down (Ali, 2019). The question however is the sustainability of the LCC operations if left on their own seeing that they are currently under the major airlines that are predominantly FSCs (Hu, Li, Tung, & Feng, 2018).

Sign up to view the full document!

In Indonesia for instance, the duopoly of Garuda and Lion Air are attempting to increase prices of their LCC subsidiaries in an attempt to be able to charge maximum fare for their FSC subsidiaries. In Management Practices in Asia (pp. Springer, Cham. Bilotkach, V. Kawata, K. Kim, T. J. Feng, J. T. Total-factor Output Efficiencies of ASEAN Airports', Airline Economics in Asia (Advances in Airline Economics, Volume 7). Kurniawan, F. Routledge. Saputri, M. E. Sari, D. May). Yadav, M. Dhingra, T. Recent developments in'low cost carrier'research: a review.  International Journal of Business Excellence, 16(4), 427-453.

Sign up to view the full document!

From $10 to earn access

Only on Studyloop

Original template