Flag carrier Garuda Indonesia willclose some of its loss-making routessuch as to Europe and will focus onregional services.
Garuda CEO, Emirsyah Satar saidthe management will add flights onprofitable routes such as Jakarta-Australia,Jakarta-China, and Jakarta-India."We target a 15 percent growth in international services this year," Satar said.
Last year, only nine of Garuda’s 24international routes were profitableand of its 27 domestic routes, only 21routes were profitable.
"That is why this year we are focusedon increasing services to Australia,China, India and some Asean countries," Satar added.
To support this plan, Garuda willlease two B737-800NGs with a totalvalue of $1.6 million. Both aircraftwill arrive within the third and fourthquarters this year.
For long term plan, Garuda plansto purchase 25 B737-800s. Satar said itis part of efforts to accelerate recoveryprocess of Garuda.
"The fund for fleet expansion will be from state capital, which totals Rp500 billion or $52.5 million," Satar said.
Commenting on last year’s performance, Garuda reported improvementsin revenues, load factors and yields,while it significantly reduced its lossby up to 50 percent from a Rp 688.4billion loss incurred in 2005, to a Rp298.2 billion loss in 2006.
In a statement, the companysaid: "In 2005, out of the 25 routesserved by Garuda, only five were considered profitable, in 2006, the number of profitable service routes rose to 24, and only 2 remained unproductive."
– Siktus Harson