Garuda looks to the future

Garuda Indonesia Group will expand its fleet, open local and overseas destinations, upgrade Garuda Indonesia as its premium airline and focus its budget airline Citilink on the mass market while revamping its entire corporate identity.
These moves follow the completion of the first-phase plan that succeeded in lifting Garuda Indonesia from three to four stars and rescuing it from huge losses years ago. Now the group will continue enhancing the airline’s services to deal with even tougher competition.
Emirsyah Satar, group president and chief executive officer, said yesterday that the number of domestic air travellers soared from 18 million in 2008 to 53 million this year, but Indonesia’s population is 230 million, so there was more room to grow.
Indonesia’s economy is expected to surpass Brazil and Russia to enter the top five in the world within five years.
By 2015, the premium segment is projected to be 24 per cent of the total market while the budget segment increases to 66 per cent. Outbound travel will grow 8 per cent per year from 2011-15 and inbound by 6 per cent per year.
Indonesia received 7 million visitors last year and expects to welcome 15 million within five years. The top five sources were Australia, Japan, South Korea, China and Europe.
The group will promote Citilink in the domestic market by adding more destinations. From January to June, it boosted flight capacity by 25 per cent, leading to passengers increasing by 44 per cent.
“Domestic air travel is expected to grow 50 per cent over five years, so we have placed orders for 25 Airbus A320s for a low-cost fleet,” he said.
Citilink is set to beat major players Lion Air, AirAsia and Tiger Airways. However, spreading outside the country depends on further plans.
The rebranding campaign under “Garuda Indonesia Experience” is expected to raise the group’s presence, Satar said. It will differentiate between premium and mass markets and promote and develop subsidiaries in such businesses as maintenance services, hotels, travel companies, ground services and healthcare.
The group has ordered 62 new aircraft for delivery by 2015, with deployment to both Garuda and Citilink. The group will boast 154 aircraft in five years. Aircrews, pilots and officers will also be added.
With more aircraft, the airline can serve more routes abroad including to Thailand, India, Europe and East Asia.
Aree Haperpool, sales and marketing manager at the Bangkok office, said Garuda Indonesia planned to begin operating the Jakarta-Bangkok-Europe route in March, possibly to Copenhagen, Paris or Frankfurt. The airline currently flies from Jakarta to Amsterdam via Dubai.
Direct flights will be launched between Bangkok and Bali by the first quarter of next year. On June 17, frequencies between Bangkok and Jakarta were bumped up from seven to 14 per week, which helped improve the average load factor by 50-80 per cent compared without additional flights.
“Indonesia to Thailand will continue to increase significantly, as the Indonesian government early this year revoked its fiscal tax or outbound-travel fee that cost more than Bt6,000 per person. I think Indonesian visitors will surge from 20,000 per month to 30,000 this year,” Aree said.
Thais heading to Indonesia would also multiply, as Garuda recently signed an agreement with some big companies to bring it more customers.
Besides Garuda, two more airlines are plying the Thailand-Indonesia route – Thai Airways International with 10 flights a week to Jakarta and seven flights a week to Bali, and AirAsia with daily service to Jakarta. All carry 3,000 passengers per month and most are from the leisure market.