Asian flag carrier Garuda Indonesia is to cut services on its single route to Europe, due, it says, to the economic uncertainty in the Continent and the resultant decline in air traffic demand for its link between Jakarta and Amsterdam, via Dubai. The airline will cut frequencies from a daily basis to four per week from March 1, 2012, all operated using a two-class Airbus A330-200 configured with 36 Business Class and 186 Economy seats.
Garuda relaunched its route to the Dutch capital in June 2010 after an absence of around six years and this was due to be the stepping stone for further expansion across Europe with ambitions to open links before 2014 to destinations including Frankfurt, London, Paris and Rome.
“Europe will play an integral role in our five-year ‘Quantum Leap’ strategy which includes growing our international network as well as developing new concepts for both business and leisure travel. Establishing a strong presence in Amsterdam and the rest of Europe is an important element in meeting these growth targets,” said Emirsyah Satar, President and Chief Executive Officer, Garuda Indonesia, at the time of the relaunch.
In the past year an estimated 1.28 million O&D passengers travelled between Indonesia and Europe. Garuda has just a 5.5 per cent share of this traffic and is the number six airline on the route. The market is dominated by Singapore Airlines (19.7 per cent) and Emirates Airline (15.8 per cent), while KLM Royal Dutch Airlines is the largest European operator (10.1 per cent).
Garuda will instead focus on developing its activities in local markets. It will add a third daily flight between Jakarta and the Malaysian capital Kuala Lumpur from the start of February (an O&D market of approximately 1.4 million annual passengers which is dominated by budget carrier AirAsia and sister venture Indonesia AirAsia). The airline currently has an estimated nine per cent share of the annual traffic.
A new five times weekly Denpasar – Tokyo Haneda service will also be introduced from April 27, 201 flown by a 257-seat, two-class A330-300. Garuda currently serves the Japanese capital from both Jakarta and Denpasar, serving Narita Airport, while connections are also offered from Denpasar to Central Japan International, close to Nagoya, and Kansai International in Osaka. To facilitate the expansion the carrier will close the existing link to Central Japan International from April 10, 2012 as demand on this particular route has fallen following last year’s tsunami.
There has been a slight fall in traffic between Indonesia and Japan during the past year with annual O&D passenger numbers slipping by 1.5 per cent to an estimated 878,000 following some frequency and route cuts. However, over the same period Garuda has seen its share of the country-to-country market increase from 33.9 per cent to 47.4 per cent.
Further expansion in the region will also see the introduction of a daily link between Jakarta and Taipei from May 19, 2012, a route already served by China Airlines and EVA Air on an up to daily frequency. Both Taiwanese carriers currently use widebodied equipment on their flights, but Garuda plans to use a 156-seat Boeing 737-800 with seating for 12 Business Class and 144 Economy seats. An estimated 229,000 O&D passengers travelled on this route in the last year paying an average one-way fare of $775.
The international expansion will be supplemented by growth in the domestic market with increased frequencies on some developing routes. A fifth daily rotation will be introduced between Jakarta and Batam and a sixth on the Jakarta – Pekanbaru link, while a daily flight will be introduced between Bandung and Surabaya from February 10, 2012. This flight, operated by a two-class, 96-seat, 737-500 will also offer connection opportunities to Bali and Makassar from Bandung, via Surabaya.
This latest expansion follows just months after Garuda boosted frequencies on its flights from Jakarta to Beijing, Melbourne, Shanghai and Seoul and from Denpasar to Melbourne, Seoul and Sydney. The airline currently offers 236 flights per week to 16 non-stop destinations from its home market, a 17.7 per cent share of the available seat capacity.
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