Indonesia’s government is reportedly planning to add flag-carrier Garuda Indonesia to a larger holding company in a bid to streamline marketing operations, cut prices and attract more tourists.
Garuda Indonesia’s financial situation worsened as lessors took legal action for unpaid leases and government aid to help the flag-carrier weather the COVID-19 crisis has yet to arrive.
In a move to promote tourism spending in Bali, Garuda Indonesia is exploring new long-haul flights from the resort island to Europe, India and the U.S. even though the routes would be unprofitable ones.
The Indonesian government is in the process of helping Garuda Indonesia draft a $1 billion financing proposal as the state-controlled airline has a $500 million Islamic bond (sukuk) due in June.
Garuda Indonesia saw first quarter (Q1) 2020 revenue drop by 33% year-on-and year—and sharper declines are yet to come in April as COVID-19 restrictions within Indonesia tighten.
After two consecutive lossmaking years, Garuda Indonesia achieved a profit of $6.5 million for 2019, reversing its $229 million loss a year prior; the airline did not provide an outlook for 2020.
Singapore Airlines (SIA) and Garuda Indonesia are now codesharing on each other’s flights between Singapore and the Indonesian capital Jakarta after expanding an agreement that started nine years ago.
The airline’s current three times weekly Jakarta – London Gatwick operation, which acts as a continuation of flights from the Indonesian capital to Amsterdam, will grow to a five times weekly schedule when the move to Heathrow takes place from March 31, 2016 as it draws on SkyTeam alliance transfer flows via the hub airport to bring additional passenger flows onto the city pair.
Garuda’s plans to introduce non-stop flights to Europe have been restricted by limited runway capacity at Jakarta’s Soekarno-Hatta International Airport, with the pavement classification number (PCN) of the runways and apron at Soekarno-Hatta Airport not meeting the required level of strength that is typically needed for the operation of a full capacity, heavy duty commercial airliner such as the Boeing 777-300ER.
In an interview with the Chinese media following the arrival of the A330 in China, Xu Xin, chief executive officer, Beijing Capital Airlines said that over the next five years the carrier intends to purchase at least 30 widebody aircraft to open more international routes between Chinese cities and major overseas tourist destinations.
In a recent interview, Garuda Indonesia's CEO, Arif Wibowo, outlined Chengdu, Chongqing, Harbin, Nanjing, Ningbo, Shenyang, Taiyuan, Wuhan, Xian and Zhengzhou as possible future markets for the carrier. The Indonesia – China market is highly competitive one with four other airlines – all Chinese operators - flying between the two countries alongside Garuda.
