Garuda Indonesia will hold off any thoughts of adding maindeck capacity for at least five years, the airline’s president and CEO, Arif Wibowo told Payload Asia on the sidelines of the Association of Asia Pacific Airlines (AAPA) 2015 Assembly of Presidents in Bali recently. Wibow said that the combination of lacklustre international cargo markets, a still developing Indonesian industrial base and ample belly capacity in Garuda’s domestic market meant there was no immediate need to take on dedicated maindeck capacity.
“At this moment we are still waiting to see the growth of the cargo markets and domestically Indonesia is still now in the acceleration of industrial development. Cargo has to have its own, stronger, industrial base for the freighters’ potential,” he said.
“I think we will not add freighters in the upcoming five years onwards,” he said, adding that Garuda will maximise the belly capacity of its fleet of 34 aircraft including 11 ATR 72-600s, 10 A330-200s, 13 A330-300s, 80 B737-800s, nine B777-300ERs, two B747-400s and 16 CRJ1000 NextGen along with its largely domestic-oriented, Citilink low cost subsidiary which operates 35 A320s.
Garuda Indonesia director of commercial, Handayani (who goes by only one name), noted that it is “quite tough now in the air cargo market and we’re more focused on the belly cargo, because we want to optimise what whe currently have in our fleet.” She added that with the current cargo load factor around 40-50 per cent on the passenger bellies, there is still available capacity for both international and domestic demand.
Cargo currently contributes between 10 and 15 per cent of top line revenue for the group, or about US$300 million a year, from both Garuda and Citilink combined. Nearly 60 per cent of the group’s cargo volumes are generated from international routes, while the remaining 40 per cent is domestic cargo.
Both domestic and international will see growing volumes as the carrier is undertaking measured growth internationally with a more intensive expansion plan for the Indonesian market. The carrier’s most recent addition was a new Denpasar-Guangzhou service which operates a three times weekly B737-800NG on the route.
Wibowo added that other domestic players who operate small freighters are also holding off on adding any additional capacity, taking a similar conservative view of domestic cargo growth currently.
Garuda Indonesia currently serves 71 destinations worldwide from its main Indonesian hubs in Jakarta, Denpasar and Makassar.