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  • Garuda Indonesia and Singapore Airlines receive regulatory approval for commercial joint venture

    Garuda Indonesia and Singapore Airlines receive regulatory approval for commercial joint venture

    Garuda Indonesia and Singapore Airlines (SIA) received the Competition and Consumer Commission of Singapore’s (CCCS) approval of their commercial joint venture agreement.

    With this approval, the airlines will be able to deepen their strategic partnership on a wider range of commercial activities that will bring greater benefits to both airlines, as well as Indonesia and Singapore. These potentially include operating joint revenue sharing flights between the two countries, coordinating flight schedules to offer travellers more options and seamless connectivity between Singapore and Indonesia and beyond, and exploring joint sales and marketing initiatives that provide greater value to both airlines’ customers.

    Since Garuda Indonesia and Singapore Airlines signed an agreement to deepen their partnership in May 2023, the carriers have been working on initiatives including giving GarudaMiles and KrisFlyer members the option to earn and redeem miles on codeshare routes. They have also embarked on joint marketing initiatives to promote tourism activities.

    The airlines today codeshare on a wide range of flights, including between Singapore and Indonesian cities of Bali, Jakarta, Medan, and Surabaya, as well as on long-haul routes between Singapore and Johannesburg, London (Heathrow), and Mumbai.

    Mr Irfan Setiaputra, President and Chief Executive Officer, Garuda Indonesia, said, “We are very pleased to receive this approval, as it marks significant progress towards our commitment to enhance service quality as well as broaden both Garuda Indonesia and Singapore Airlines’ networks through a deepening partnership.

    The joint venture initiative that we are preparing today has been one of the strategies to ensure extensive value creation for our loyal customers. Having regulatory approval as the first step in a commercial agreement will provide more opportunities for developing well-executed strategic ideas.

    “Moreover, we hope that this joint venture agreement can provide seamless services for passengers with more flight schedule options and ease in earning and redeeming mileage. Also, this collaboration may deliver concrete action to contribute to boosting Indonesian tourism activities, which will support the post-pandemic economic recovery progress,” Mr Irfan explained.

    Mr Goh Choon Phong, Chief Executive Officer, Singapore Airlines, said, “The robust strategic partnership between Garuda Indonesia and Singapore Airlines has enabled us to broaden our codeshare services over the last few years, offering our customers more choices on flights. With the CCCS’s approval, we are poised to deepen our collaboration across a wider scope of commercial activities.

    Along with the ongoing work to strengthen the links between our frequent flyer membership programmes, this will provide our customers with even more options and enhanced value. This partnership underscores both airlines’ commitment to improving connectivity between Indonesia and Singapore and beyond, boosting both business and leisure travel, and contributing to economic growth.”

  • Garuda Indonesia and Singapore Airlines strengthen commercial partnership

    Garuda Indonesia and Singapore Airlines strengthen commercial partnership

    Garuda Indonesia (GA) and Singapore Airlines (SIA) today committed to deepen their commercial partnership, with the aim of offering reciprocal benefits for their frequent flyer programme members, and to explore revenue sharing arrangements for flights between Indonesia and Singapore, subject to regulatory approvals.

    The frequent flyer programme agreement was inked by Garuda Indonesia Chief Executive Officer (CEO) Mr Irfan Setiaputra and SIA CEO Mr Goh Choon Phong in Jakarta today, while the joint venture revenue share agreement was signed by Garuda Indonesia Director of Service and Commercial Mr Ade R. Susardi and SIA Chief Commercial Officer Mr Lee Lik Hsin.

    When launched, the frequent flyer partnership will allow GarudaMiles and KrisFlyer members to earn and redeem miles on codeshare flights operated by both airlines. The revenue sharing agreement, when implemented, will support joint capacity growth, marking a significant step in the plans for a proposed commercial joint venture arrangement that covers Garuda Indonesia and Singapore Airlines flights between Singapore and Indonesia.

    Both carriers are continuing with joint marketing activities to promote tourism. This potentially includes joint activities to promote tourist traffic to Indonesia, including familiarisation trips for travel trade and media.

    Singapore Airlines and Garuda Indonesia have a strong codeshare partnership that has expanded in recent months. Today, Garuda Indonesia codeshares on Singapore Airlines flights between Singapore and the Indonesian cities of Bali, Jakarta, Medan, and Surabaya, as well as long-haul routes between Singapore and Johannesburg, London (Heathrow), and Mumbai. SIA codeshares on Garuda Indonesia flights between Singapore and Bali, Jakarta, and Surabaya.

    Mr Irfan Setiaputra, President and CEO of Garuda Indonesia, said that this partnership is part of Garuda Indonesia’s efforts to improve the Company’s performance through a strategic commercial partnership, especially in providing added value to customers. “Having the same mission in optimising the potential of the aviation business ecosystem in South East Asia after the pandemic, this initiative is certainly an important manifestation of both airlines’ commitment to continue strengthening our well-established cooperation,” Mr Irfan explained.

    He added: “This partnership is a special moment for us, which also marks the 58 years of Garuda Indonesia’s journey in connecting Indonesia and Singapore. In the future, we hope that this partnership will continue to enhance social, cultural, and tourism relations between Indonesia and Singapore whilst offering seamless access for customers to enjoy various destinations served by both airlines.”

    “We hope that the expansion of this partnership will bring added value for Singapore and Indonesia, which are served by both airlines. Furthermore, this collaboration is also expected to not only provide added value for both airlines’ customers, especially through the ease of earning and redeeming miles for tickets and other exclusive benefits, but the hope is that it will strengthen Garuda Indonesia’s support for national tourism by providing more access to points in Indonesia for foreign tourists who will visit Indonesia via Singapore in the future,” Mr Irfan said.

    Mr Goh Choon Phong, Chief Executive Officer, Singapore Airlines, said: “Our win-win partnership with Garuda Indonesia will improve the connectivity between Indonesia and Singapore for our customers. This will help to meet the increasing demand for air travel between the two countries and beyond, as well as facilitate the growth of tourism and economic activities. Furthermore, by deepening the synergies between our frequent flyer programmes, we can enhance the benefits for our loyal customers, offering them more opportunities to earn and redeem miles when travelling with both airlines.”

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  • Garuda Indonesia Expects to Make Profit in 2018: CEO

    Garuda Indonesia Expects to Make Profit in 2018: CEO

    National flag carrier Garuda Indonesia expects to end 2018 in profit and is targeting a net profit of Rp 1 trillion ($69 million) for 2019, its chief executive said on Friday. Garuda saved $96 million by working with lessors to restructure the financing of its planes until November 2019, chief executive Ari Askhara told reporters.

    “Our net profit for 2018 is positive, even though it might be a small amount,” he said, attributing the result to cost-cutting, renegotiation of aircraft leases and new partnerships.

    The result would be a marked improvement for the airline, which reported a $116.86 million net loss for the first six months of 2018. Ari declared in September that Garuda had abandoned hopes of making a profit this year, after struggling with fuel costs and a rising rupiah versus the US dollar.

    The new partnerships include Garuda taking operational control of rival Sriwijaya Group in November, gaining a majority share of the fast-growing domestic aviation market.

    That partnership could be escalated to a 51 percent share ownership of Sriwijaya, depending upon discussion with Garuda advisors and the Ministry of State-Owned Enterprises, Ari  told a media briefing. Garuda’s profit had yet to see a positive boost from Sriwijaya, he said.

    “Garuda might also see a partnership with [Malaysia’s] AirAsia … through [Garuda unit] Citilink but it’s very early,” he said.

    AirAsia president director Dendy Kurniawan confirmed in a statement that early talks with Garuda were underway, with “various forms of cooperation to support the industry being discussed,” but noted no final decision has been reached.

    Garuda has been battling for market share against local market leader Lion Air, which in October suffered a crash of a Boeing 737 MAX jet, killing all 189 people on board.

    Ari said Garuda had 30 million passengers in 2018 and would expand its fleet to include a new Airbus SE 330neo in September 2019 and a 737 MAX jet at the end of 2020.

    New profitable routes domestically and internationally are planned for 2019, he said.

    Ari also said an intended private placement of shares from subsidiary Garuda Maintenance Facility AeroAsia to longtime partner Air France Industries KLM Engineering & Maintenance had been canceled.

    He said that he considered the current share price of GMF AeroAsia too low and wanted to increase the company’s valuation first.

    Ari said GMF Aeroasia would partner with Dunlop and China Construction Indonesia to build a tire plant in 2019, with the first stage seeing a $300 million investment from the companies involved.

    The plant would be for the domestic market and supply 50 percent of its output to Garuda, 48 percent to Lion Air and 2 percent to AirAsia Group.

    Domestic air traffic more than tripled in Indonesia over the past decade as rising prosperity and lower fares made flying affordable for more people.

    With 129 million passengers in 2017, the Southeast Asian country is the world’s 10th-largest aviation market and is projected to continue growing.

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  • Indonesia’s Garuda Shares Soar on News of Sriwijaya Deal

    Indonesia’s Garuda Shares Soar on News of Sriwijaya Deal

    National flag carrier Garuda Indonesia’s share price surged 19 percent on Thursday after the airline said it had taken over operational control of low-cost rival Sriwijaya Air. The move is seen as an effort to help Sriwijaya improve its financial performance, while potentially expanding Garuda’s market share to challenge Indonesia’s largest airline company, the Lion Air Group.

    Garuda announced the joint operation through its subsidiary, Citilink Indonesia, on Wednesday after signing an agreement with Sriwijaya Air and NAM Air – both under the Sriwijaya Air Group – on Nov. 9. The partnership could also be escalated to share ownership in the Sriwijaya Group, Garuda said in the statement.

    The joint operation will give the flag carrier a combined 46 percent share of the country’s domestic aviation market, while the country’s largest budget carrier, Lion Air, controls 51 percent, according to the Sydney-based CAPA Centre for Aviation.

    The remainder of the market is shared by the local unit of Malaysia-based AirAsia, charter service Susi Air and Jakarta-based Trigana Air Service.

    “The joint operation is intended to help the Sriwijaya Air Group improve its operational and financial performance to help Sriwijaya fulfill its commitments to third parties, including those within the Garuda Indonesia Group,” Garuda managing director Askhara “Ari” Dhanadiputra said in a statement.

    Sriwijaya Air planned to undertake an initial public offering last year, but its weak financial performance put a stop to that.

    The carrier suffered a loss last year due to rising fuel costs and the weaker rupiah after three profitable years. Most of Sriwjaya’s revenue is in rupiah, while the carrier’s expenses are mainly in US dollar, including fuel, aircraft maintenance and debt.

    According to Garuda’s financial report, Sriwijaya owed the flag carrier around $9.33 million as of Sept. 30 this year for the overhaul of 10 CFM56 turbofan aircraft engines.

    “We hope the partnership will help restore the financial performance of the Sriwijaya Air Group amid increasing competition in the domestic aviation industry. We believe the Garuda Indonesia Group has an excellent ability to manage the airline business,” Sriwijaya Air managing director Chandra Lie said.

    Price War

    Domestic air traffic in Indonesia more than tripled over the past decade as rising prosperity and lower fares made flying affordable for more people.With 129 million passengers in 2017, Indonesia is the world’s 10th-largest aviation market and it is projected to continue growing.

    Transportation Minister Budi Karya Sumadi expressed hope that the consolidation between Citilink, Sriwjaya Air and NAM Air would also help end a ticket price war among local airlines.

    “We hope this would end the price war and establish a new price equilibrium that covers the costs and margins to allow every airline to grow,” Budi said on Thursday.

    His ministry has long held the view that airlines’ race to the bottom in their price offerings would put pressure on their finances, which could make them more likely to neglect safety precautions.

    Budi said the joint operations between Citilink and Sriwijaya could also help to reduce redundancy on some of the country’s busiest routes and divert resources to other destinations.

    “There are many airports in eastern Indonesia that want to be served,” he said.

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  • Garuda Indonesia Holds Empty Flight Promo

    Garuda Indonesia Holds Empty Flight Promo

    Indonesia Airline Garuda holds promo for “empty legs flight” or non-passenger flights during the month of 2018 Ramadan.

    “‘Empty legs flight’ is a term for when, as an example, a flight from Solo to Jakarta is packed with passenger but there is no demand for the opposite direction, so it is empty. The promo price for Solo-Jakarta route will be applied on the travel period May 18 to June 19, 2018 and June 27, 2018,” said General Manager of Garuda Indonesia of Surakarta Branch Office, Hendrawan in Solo, Wednesday (5/9/2018).

    As for the Jakarta-Solo route, the ticket promo is valid for May 17 to June 7, 2018 and June 27, 2018.

    “Especially for June 27, this coincides with the simultaneous elections in Indonesia,” he said.

    He said for prices applied during the promo period starts from IDR440.000 per passenger.

    “Normal price for these routes would be above IDR1 million per passenger,” he said.

    He hopes the promo can boost travel demand during the “low season”.

    “Usually there is a decrease in the number of passengers in the first two weeks of Ramadhan, a decrease of about 15 percent either for Solo-Jakarta route or vice versa,” he said, as quoted from Antara.

    He said on a normal day, of a capacity of 162 seats, the average load rate is about 72 percent or equivalent to 583 passengers for five flights of Solo-Jakarta route per day.

  • Garuda Indonesia Denies Offering Two Free Tickets

    Garuda Indonesia Denies Offering Two Free Tickets

    Many website links recently suggested that Garuda Indonesia offering two free tickets in the celebration of its 69th anniversary. However, the state-owned airline management denied the news.

    “Garuda Indonesia ensures that such promotion info was invalid and is not officially from Garuda Indonesia,” said the company’s secretary Hengki Heriandono in a written statement dated Wednesday, May 9.

    Hengki asserted that Garuda Indonesia has never released such information related to promotion of ticket discounts or free tickets. He reminded all ticket promotion and marketing program were cited in Garuda Indonesia official application and social media.

    Earlier, a website https://www.garuda-indonesa.com/tikets and https://www.xn--garuda-indonesa-llc.com broadcasted in short message stating Garuda Indonesia offers two free tickets to commemorate its anniversary.

    In the website, visitors are required to fill a survey. Instead of getting the two free tickets, visitors are asked to share the link via WhatsApp.

    Hengki calls on the public not to trust false news or hoax and confirm all promotion info through Garuda Indonesia official platform or contact the 24-hour Garuda Call Center.

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  • Garuda Indonesia Eyes $2.4b From Singapore Airshow

    Garuda Indonesia Eyes $2.4b From Singapore Airshow

    National flag carrier Garuda Indonesia eyes $2.4 billion in transactions from the 2018 Singapore Airshow, which takes place at the Changi Exhibition Center on Feb. 6-11, the company said in a statement on Monday (05/02).

    The airshow, the biggest of its kind in Asia, gathers major stakeholders in the aviation industry.

    During last year’s edition, Garuda signed transactions worth $129 million. This year, it brings its subsidiaries, including maintenance, repair and operations (MRO) company GMF AeroAsia, budget airline Citilink Indonesia and operations support unit Aerowisata.

    “We’re trying to tell everyone that Garuda Indonesia is a giant in the aviation industry in region, and this event is the place for us to showcase our excellence,” Garuda Indonesia chief executive Pahala Mansury said in the statement.

    Pahala added that the group will be looking for partnerships to expand its business.

    “We’re aiming to penetrate the market this year,” GMF AeroAsia chief executive Iwan Joeniarto said.

    GMF AeroAsia says it has recorded significant growth in the past few years. Overseas investors have recently expressed interest in buying the company’s shares.

    In the third-quarter of 2017, GMF generated $310.5 million in revenue, which exceeded its initial projection by 102 percent, the company said on its website. Its net profit was $38.1 million, up 8.9 percent from the same period a year earlier.

    Meanwhile, Citilink Indonesia said it will take advantage of the event to open international routes. Last year, the company said it will inaugurate international flights in the Asean region in 2018.

    “With our participation in the Singapore Airshow, we try to prove that as a premium low-cost carrier we are ready to open international routes in the immediate future,” Citilink chief executive Juliandra Nurtjahjo said.

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  • Garuda Indonesia Workers’ Union Demands Revamp of Management

    Garuda Indonesia Workers’ Union Demands Revamp of Management

    Flag carrier Garuda Indonesia’s employees union urged the government to revamp the company’s management and board of directors, saying they feared the carrier will keep losing money in years to come if no change is forthcoming.

    The head of the union, Serikat Pekerja Garuda (Sekarga), Ahmad Irfan said rs on Tuesday (23/01) they had written a letter to President Joko Widodo outlining their demands, but have yet to receive any response.

    “We also want to discuss this with the State-Owned Enterprises Minister next month,” said Ahmad, adding that the union is confident the government will be on their side.

    Ahmad said the union made the decision to complain to the president directly after Garuda’s aircrew and employees repeatedly asked for a meeting with its board of directors but were turned away each time.

    The union has been demanding that Garuda reduces the size of its board of directors from nine directors to six.

    However, when the carrier appointed a new management team they actually added three new directors to the board.

    “Such a waste,” Ahmad said.

    Ahmad also questioned the directors’ ability to end Garuda’s financial problems since none of them has any experience in the aviation industry. He did not name the directors.

    The carrier reported a $222 million net loss in the first nine months of last year, more than five times the $44 million it lost in the same period in 2016.

    Garuda Indonesia president director Pahala Mansury said in September the losses were due to higher fleet costs and increasing fuel expenses.

    The union also criticized massive delays of Garuda flights from Denpasar, Bali, on Dec. 2. The poorly handled incident affected both domestic and international flights.

    He said the delays were not caused by the Mount Agung eruption, but due to a scheduling mishap stemming from teething problems with its new Sabre online system adopted in August last year.

    Garuda’s Response

    Garuda Indonesia’s vice president and corporate secretary Hengki Heriandono said he appreciated the union’s effort to help solve the carrier’s problems.

    “All of our employees are committed and care about the company’s future. We will listen to all their demands and suggestions,” Hengki said.

    He said safety will always be the carrier’s main priority.

    According to him, the government can revamp Garuda’s board of directors and management at any time as long as it is done according to the law and good governance principles.

    Hengki said Garuda has already talked to aircraft manufacturers to delay deliveries of new planes to help the company reduce costs by 25 percent.

    The carrier will also maximize the use of its aircraft in profitable routes.

    Reuters reported the carrier expects to turn around its financial performance this year, targeting $4.9 billion in revenue, up from an estimated $4 billion last year.

    It also forecasts a net profit of $8.9 million in 2018.

    The company plans to issue $750 million in global bonds to refinance its debt, and a separate bond issuance totaling Rp 2 trillion ($160 million) to fund business and operational expenses.glo

  • Garuda Indonesia reigns as world’s best airline cabin crew for fourth consecutive year

    Garuda Indonesia reigns as world’s best airline cabin crew for fourth consecutive year

    Indonesia’s flag carrier Garuda Indonesia has won the world’s best airline staff award for the fourth year in a row according to a survey conducted by international rating organization Skytrax.

    Garuda Indonesia took first spot in the category at this year’s World Airline Awards, dubbed as the Oscars of the aviation industry, beating other prestigious airlines in the region such as Singapore Airlines and Thai Airlines.

    In the same category, Japan’s largest airline All Nippon Airways came second, followed by Taiwan-based international airline Eva Air and Thai Airways and Singapore Airlines.  The awards were announced at the Paris Air Show yesterday.

    According to Skytrax, the award “recognizes the highest all-around performance of an airline’s cabin staff” as well as the quality of staff members’ techniques and efficiency and their enthusiasm, attitude and overall hospitality.

    The survey was conducted from August 2016 to May 2017, involving 19.8 million votes.

    This year, Garuda Indonesia improved its position in the best airline category, climbing one spot to enter the top ten carriers on the world’s best airline list.

    The world’s best airline award for 2017 went to Qatar Airways, which took the title from fellow Middle Eastern carrier Emirates.

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  • Garuda Indonesia soars above challenges, gears up for growth

    Garuda Indonesia soars above challenges, gears up for growth

    Ready to face their business growth that is riddled with challenges, Garuda Indonesia is optimistic that both its operational and financial performances will experience sustainable and positive growth in the next two years. This will be attributed to their business strategy, which is to focus on financial performance transition.

    Antara News quoted Garuda Indonesia President Director, Pahala N Mansury, saying that the airline would focus on performance improvement by taking 10 financial and business performance initiatives in a manner that would improve both operational and financial conditions.

    The 10 financial performance strategy initiatives are optimising usage of their fleet, lowering fleet cost, improving service related to departure and arrival time as well as reforming the service user income management services. “We are quite optimistic about achieving it in one or two years time,” he said.

    Pahala said the company is currently in a good position in term of operation and services to the public. However, the main challenge the company is facing is to find ways to improve its financial performance in a sustainable way to ensure business continuity.

    “We have identified that the phase of the business cycle that the group is undergoing is temporary. Infrastructure, human resources and products, and all business lines have a good platform to support the performance improvement,” Pahala said.

    He also lauded all sides for their input and attention into improving the group’s performance and business dynamics.

    Meanwhile, state shipping company PT Pelayaran Indonesia (Pelni) has paired up with Patra Jaya, a subsidiary of state-owned energy firm PT Pertamina, to introduce a cruise ship to boost the tourism industry.

    PT Pelni Kupang brand Head Adrian on Sunday said a memorandum of understanding was signed between the two parties, where the MoU entails the construction of a cruise ship to support the nation’s tourism industry in 10 tourists destination.

    The ten tourists destinations include Labuan Bajo and Riung, East Nusa Tenggara. The ship is currently being built in South Korea and is expected to be completed and sailing by 2018.

    Both Pelni and Pertamina had initially planned to purchase a cruise ship but the plan was halted following a regulation banning government agencies to purchase second-hand goods from abroad.

    Pelni currently operates both passenger and transport ships.

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  • Garuda aims to improve financial performance in two years

    Garuda aims to improve financial performance in two years

    Garuda Indonesia is optimistic its operational and financial performance will see sustainable positive growth in one to two years, fueled by business strategy focusing on financial performance transformation.

    “Garuda Indonesia will focus on improving its performance by taking 10 financial and business performance initiatives in such a way that its operational and financial conditions will be better and we are quite optimistic about achieving it in one to two years time,” Garuda Indonesia President Director Pahala N Mansury said here on Sunday.

    In the phase of business growth which is full of challenges, Pahala expressed gratitude to all sides for their attention and inputs to improve the financial performance and business dynamics of Garuda Indonesia.

    “Of course, this is worthy of out praise, particularly when it comes to the commitment and concern of all stakeholders to ensure that Garuda Indonesia as national flag carrier will always have good business performance,” he said.

    He said the company is currently in very good condition in terms of operations and services to the public.

    The challenge that the company must fulfill now is related to how to improve its financial performance in a sustainable way to ensure the continuity of its business, he said.

    “We ascertain that the phase of business cycle that Garuda Indonesia is going through is only temporary now that in terms of infrastructures, human resources and products, all business lines of the company have good platform to support the improvement of its performance,” he said.

    Among the 10 financial performance strategy initiatives are making optimum use of fleet, lowering the costs of fleet, improving services related to punctual departure and arrival time, and reforming the system of managing income from service users.

  • Garuda Indonesia Posts USD 9.36mn Profit

    Garuda Indonesia Posts USD 9.36mn Profit

    Flag carrier PT Garuda Indonesia (Persero) posted a net profit of USD 9.36 million, or IDR 124.5 billion, as of the end of 2016, as flight frequency increases by 9.89 percent to 274,969 flights from 249,974 in 2015.

    “The increase in flight frequency was in line with the company’s effort to expand both domestic and international flights,” Garuda Indonesia Vice President of Corporate Communication Benny S. Butarbutar said in a written statement received in Jakarta on Wednesday, April 12, 2017.

    In 2016, the company carried 35 million passengers by both Garuda Indonesia and its subsidiary Citilink Indonesia. Garuda Indonesia Group also recorded increase in ancillary revenue, strategic business unit (SBU) revenue, as well as other sectors at US$392 million or a 13.7 percent increase compared to 2015 at US$344.4 million.

    The press release stated that Garuda Indonesia’s on time performance (OTP) in 2016 was recorded at 89.51 percent, an increase compared to the previous year at 88 percent. The OTP figure was achieved despite challenges in developing aviation operational infrastructures, such as service migration to newly opened Terminal 3 of Soekarno-Hatta Airport and weather-related force majeure.

    The average occupancy rate in 2016 was 73.1 percent for Garuda and 76.8 percent for Citilink. As for air cargo business, Garuda Indonesia managed to improve air cargo transport to 415.824 tons, or an 18.22 percent increase compared to 2015 at 351.724 tons.

    All in all, the total air cargo revenue in 2016 amounted to US$219.15 million or a 16.65 percent increase compared to 2015 at US$187.87 million. In 2016, Garuda Indonesia Group added its flight capacity as part of fleet revitalization by purchasing 17 aircraft, namely four ATR 72-600 aircraft, four A330-300 aircraft, one B777-300ER aircraft and eight A330-200 aircraft. As such, as of the end of 2016, Garuda Indonesia Group operates 196 aircraft with an average age of 4.6 years.

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  • Garuda Indonesia Keeps Expanding Despite 89% Profit Slide

    Garuda Indonesia Keeps Expanding Despite 89% Profit Slide

    Indonesian flag carrier Garuda Indonesia will continue expanding despite a lackluster performance last year during which profit dropped by 89%, President Arif Wibowo said on Wednesday.

    Garuda posted $8.1 million in net income in 2016, from $76.5 million the year before. Wibowo said the decline was “manageable,” and attributed it in part to the company’s increased flights on existing routes and the opening of new ones. Garuda last year started connecting Indonesia’s resort island, Bali, with a few Chinese cities, and commenced flights to Mumbai.

    Its available seat kilometers — a measure of passenger-carrying capacity — last year was up by 13%. Wibowo said he expects a similar increase this year.

    “First half of 2016 was loss-making due to the expansion,” Wibowo said. “But that is part of a growth strategy that I must take. In 2017 we’ll keep maximizing our capacity growth, by 10-12%.”

    To achieve this, Garuda will increase its service to less-connected, underdeveloped eastern Indonesia regions. For international destinations, China will remain a focus, though Garuda is also working on flying to the U.S. and Russia.

    Profit was also dragged down by declining passenger yields — measure of average fare paid per mile — which dropped from 9.6 U.S. cents in 2012 to 6.2 U.S. cents in 2016 industrywide in Asia Pacific.

    Garuda’s low-cost subsidiary, Citilink, was especially hit hard by declining yields. It posted a net loss of $9.7 million last year from a $3.5 million profit it made in 2015, despite an 18% growth in passengers to 11 million.

    Garuda saw its passenger numbers grow just 1.4% in the same period. The group’s market share in the country shrank slightly from 43.5% to 41.7% for domestic flights, and from 27.1% to 26.9% for international ones.

    “It’s very tough competition in the aviation industry over the past five years. Passenger traffic has increased, but there has been tremendous pressure on yields,” Wibowo said.

    He added that the state-owned company is approaching the government to increase lower tariff limits for airlines operating in Indonesia, citing increasing fuel prices, to prevent a price war.

    GMF AeroAsia, which offers maintenance services for aircraft, was the best-performing subsidiary last year with a 60% profit increase to $57.7 million. Wibowo said the consistently good performance makes GMF a candidate for an initial public offering. Garuda is mulling the sale of 20% of GMF share to the public, which may happen this year.

    The airline is also pushing the growth of its cargo business after the establishment of a special division for cargo last year. Director of Cargo Sigit Muhartono said he would focus on expanding e-commerce delivery for the higher yields. Garuda delivered 416 tons of cargo last year, an 18% increase year-on-year.

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  • Garuda Indonesia Increases Flight Frequency of Routes to Australia

    Garuda Indonesia Increases Flight Frequency of Routes to Australia

    National airliner Garuda Indonesia (GIAA.JK) will increase its flight frequency to destinations in Australia during the holiday period from May to October, 2017.

    The company targets its passenger growth from flights to Australia to reach 650,000 passengers this year.

    “Flight frequency from Jakarta to Australia is increased to five times from four times each week, while the frequency for Bali-Australia route is raised to seven times from six times per week,” said M Arif Wibowo, President Director of Garuda Indonesia on Tuesday (3/7).

    He said the addition of frequency on flights to Australia will be adjusted with market demand during the holiday period. Thus the flight frequency will be different each period.

    The addition of frequency is part of Garuda Indonesia’s effort in meeting demands and rising market growth, and is line with the synergy commitment the company has implemented with Tourism Australia. The cooperation has boosted the number of passengers on Australia flights to more than 644,237 passengers in 2016.

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  • Garuda Indonesia to Open Lombok-Guangzhou Route

    Garuda Indonesia to Open Lombok-Guangzhou Route

    General Manager of national carrier PT Garuda Indonesia of Mataram branch Mochammad Yansuerio said that in the near future, Garuda Indonesia would open a direct flight serving Lombok–Guang Zhou, China.

    “Lombok and Sumbawa are getting more popular both at the national level and at the international level. This has become our consideration to add frequency of flights in several routes, including by opening up Lombok – Guangzhou route,” Yansuerio said in Mataram on Friday.

    “The flight is twice a week,” he added.

    In addition to opening Lombok-Guangzhou route, Yansuerio Garuda Indonesia would also increase flights serving Lombok, including Lombok-Yogya and Lombok and Makassar from once week into twice a week.

    “As for Lombok-Surabaya route and Lombok-Jakarta route whose occupancy reach 80-85 percent, we plan to increase the frequency of flights,” he added.