Speaking at a press briefing in Singapore, Garuda Indonesia president and CEO, Emirsyah Satar, said the carrier plans to add three A330-200 freighters – “we are very conservative,” he says – from end-2013 as part of its expansion plan which will see its overall fleet grow from 92
aircraft currently to 194, although 50 of those aircraft will be operated by its low cost subsidiary Citilink. Citilink was established in 2001 as the low-cost subsidiary of Garuda running shuttle
services between Indonesian cities using a fleet of B737 aircraft out of Surabaya, East Java.
“Right now cargo is a strategic unit, it’s a separate business unit and we are looking forward in terms of setting up a team and growing,” he said. In reference to Indonesian growth, Satar said the government has come out with the MP3EI, or masterplan for economic acceleration in the country to 2025, in which Indonesia is divided into six corridors for economic development –
“this means the growth of those corridors needs connections, meaning that not only passenger traffic will go up there, but also the cargo goods – that is another potential market in the domestic area.
“We see also with the investments coming into Indonesia, the potential for international goods,” which he cites the example of goods to and from Hong Kong and China, now go mostly via Singapore. “Garuda Indonesia is not enjoying those markets so there is a potential for growth,” he said. “It is a good problem to have,” he added.
The ultimate plan is to bring onboard the A330 freighters which will then ply the regional routes to China, Japan, South Korea, Taiwan, Australia and possibly the Middle East, he says. Long
haul freighters to Europe are not part of the plan currently, he added saying that with orders for 10 B777-300ERs due for delivery from middle of next year, the carrier will have ample belly capacity to market on the long haul cargo markets. “We don’t see the need for the time being unless the economy of scale and the market demand is there. For the time being we have to develop the belly cargo, bearing in mind once the B777s come in there is high capacity in terms of cargo. That is how we are going to develop our cargo business,” he added.
New era
Garuda has clearly put the dark days of decline behind it, a period in its history it would probably rather forget, when in 2007 the carrier was added to the European Union’s Blacklist of carriers
banned from its airspace along with all other Indonesian carriers. It was at that time of decline that the carrier undertook an aggressive five-year restructuring programme known as the ‘Quantum Leap’ which set the carrier on the growth course it’s now travelling. It was removed from the list in 2009, in large part because it received the International Air Transport Association (IATA) Operational Safety Audit (IOSA) which was renewed again in 2010.
Tapping growth
Satar said Indonesia – with a population of 250 million – experienced domestic passenger growth of about 16 per cent last year, on the back of average GDP growth of nearly six per cent over the last few years and expects similar growth this year.
Garuda operates mostly Boeing 737- 800s domestically and uses its current fleet of 14 A330-200/300 Rolls-Roycepowered aircraft to serve destinations in North, East and Southeast Asia. This year the carrier will be adding 22 new aircraft of which 10 are for Citilink and 12 for Garuda. But the carrier will also be retiring four aircraft for a net addition of 18, bringing the average age of Garuda’s fleet down to just under six years, which Satar notes is on par with other carriers in the region. Among the aircraft on order for delivery between 2013 and 2017 are
25 CRJ1000s, some 36 widebodies which include the three freighters, as well as the 10 B777s and 21 A330s with the remainder being narrowbodies. Garuda Indonesia currently operates 14 A330 aircraft, comprising eight A330-200s and six A330-300s.
The carrier recently reported a net loss in its bottom line in the first quarter of this year due to growing operating costs, but remains optimistic after reducing the loss from the same period a year earlier. In the January-March period, Garuda booked a net loss of US$10.71 million, compared with a $19.11 million net loss in the same period last year. “We predict a better performance in the coming quarters and the whole year because our loss [in the first quarter] is smaller,” Garuda’s finance director, Handrito Hardjono, told a news conference after the figures were announced.
Garuda also saw a 16.7 per cent increase in cargo, carrying 65,488 tonnes during the first quarter and carried 25.3 per cent more passengers from January to March than it did in the same period last year, with 4.6 million people flying with Garuda mostly to domestic destinations
during the three-month period this year. Last year, Garuda flew 3.7 million from January to March.
While scaling back its Amsterdam flights to four times weekly from daily, due to the economic uncertainty in Europe, the carrier is adding more flights to Kuala Lumpur and Taipei and adding
Haneda three times daily. Domestically the carrier is adding more frequencies to its Indonesian network, where it serves 33 cities.
