Etihad Airways signs codeshare agreement with Garuda Indonesia

Etihad Airways has signed a new codeshare agreement with the Indonesian flag carrier, Garuda Indonesia.

Subject to regulatory approval, the airlines plan to expand the scope of the agreement to include more destinations in each other’s network and offer customer benefits such as frequent flyer program reciprocity and airport lounge access.

James Hogan, Etihad Airways president and chief executive officer said: “The partnership with Garuda Indonesia will contribute to Etihad Airways achieving its goal of expanding its network and brand presence in South East Asia.

“Indonesia, the world’s fourth most populous nation, is an important source of global tourism growth and this new agreement will position both airlines to benefit from the strong demand for travel between Indonesia and the Middle East and Europe that we have seen in recent years.

“It will also stimulate trade in foodstuffs, manufactured goods and other commodities between Indonesia and trading partners in the western hemisphere which, in turn, will contribute to the profitability of the airlines’ cargo operations on the route.

“Etihad Airways is keen to expand the scope of cooperation with Garuda Indonesia to include new destinations – particularly in Indonesia – and to offer our guests a wider choice of travel options.”

Analyst Saj Ahmad said: “"Etihad is continuing its hybrid strategy of buys minority stakes and expanding codeshare deals with carriers - this pact with Garuda Indonesia puts them right at the heart of arguably the next big growth market in the Asia region.

“With Lion Air already dominating the low cost segment in Indonesia and is poised to launch two more airlines using 787s, Garuda will welcome the alliance with Etihad as it aims to turn around its business and revamp its fleet to become a more effective player both domestically and internationally from its Jakarta hub.

“With tourism being a big source of income for the country, Indonesia has been on Etihad's radar for a while, and partnering up with Garuda gives them added leverage into new markets like Denpasar and beyond.

Ahmad added: “This is another coup for the Abu Dhabi based carrier, and it's clear that their appetite for more such deals has not abated.”

The codeshare will go on sale on October 18 for travel from October 28, 2012.