We have long been a supporter of Garuda Indonesian airlines and it’s terrific to see them emerge from a period of relative uncertainty into a new stage of growth. Garuda were the original long-haul low cost carrier providing many students, back-packers and vlue-for-money seekers with cheap flights between the UK and Australia over a number of decades.Most recently there has been a series of retrenchments, following the 2002 Bali bombings, into their local and regional markets but now an exciting new global strategy is underway. Under the leadership of the dynamic ex-banker, President and CEO, Emirsyah (Emir) Satar the airline spent the 2006-2007 period consolidating its position in its home and regional markets. T
his was followed in 2008-2009 by a turnaround phase, including the European Union lifted its ban on Indonesia airline flights to Europe,which is now being superceded by a growth phase starting in 2010. Operationally On Time Performance (OTP) has risen to 84 percent, the passenger load factor last year was brought up to 73 percent, and aircraft utilization up to 9 hours per day. A closer look at Garuda’s finances shows the airline started generating profits in 2007. Last year, operating profits reached Rp 1,187 billion and net profits Rp 669 billion, out of revenues of Rp 19,400 billion.
The Jakarta Times reports that:"Only half of Garuda’s revenue comes from international routes, while Singapore Airlines, Malaysia Air System and Thai Airways, given their smaller domestic markets, rely much more on revenue from international routes. Moreover, Garuda’s domestic business carries higher margins than its international flight business.
As Emir explained, the EU ban lift is important to Garuda because it has restored the airline’s image and credibility, not so much because of its commercial impact. Amsterdam will be the first of its three European destinations to be restored sometime mid next year, followed later by Frankfurt and London. One area of focus is growing revenue by adding domestic and international routes as well as increasing flight frequency." This year, Garuda has launched Jakarta to Malang, Jakarta to Kendari, Jakarta to Kupang, Jakarta to Tanjung Karang and Jakarta to Pangkalpinang domestic routes.
Internationally Garuda has introduced a Denpasar to Hong Kong and Surabaya to Hong Kong route. Most importantly, starting in August 2009, Garuda will also fly to Sydney, Melbourne and Seoul from Jakarta, in addition to its existing routes from Denpasar to the three regional destinations.
To service this growth, the carrier will be adding five Boeing 737-800s and returning one Boeing 737-300 as its lease expires. These new planes are more fuel efficient and thus will help keep fuel cost under control. The new planes also feature roomier seats and state-of-the-art audio and video entertainment systems. With these purchases, Garuda now has a fleet of 47 Boeing 737s, in addition to six wide-bodied Airbus 330-300s and three Boeing 747-400s. Garuda also operates two Boeing 737s as part of its low-budget service, called Citilink, based in Surabaya. The plan is now to purchase a total of 50 new Boeing 737-800NGs and 10 Boeing 777-300ERs, in part to replace its existing fleet and in part to provide capacity for expansion of teh route network. These planes will be delivered in stages, starting immediately with the Boeing 737s and subsequently in 2011 for the Boeing 777s.
As I said at the start, it is wonderful to see an iconic airline achieve a dramatic turnaround, especially bearing in mind the current economic turmoil and the troubles - both natural and political, which have beset Indonesia over the last decade. We confidently expert to see the great Garuda bird logo become a frequent visitor to teh airports of Europe in the years ahead.. welcome back !