Story ID: WDgaruda05282019
Garuda Lays Plans To Scale Back Operations
By: William Dennis
Caption: The Indonesian flag carrier will drop unprofitable routes and cut frequencies on those registering low load factors.
Word Count: 349
Garuda Indonesia will scale down its operations over the next three months as part of its plan to reduce operating cost, according to the airline’s director of commerce, Pikri IIham Kurniansyah. Plans call for cuts of unprofitable routes and reduction of frequencies on those with low passenger loads.

The Jakarta-based flag carrier already has axed its daily Belitung-Singapore flight. It will halve the frequency of its six-times-weekly Jakarta-Amsterdam service using Boeing 777-300ER jetliners effective September 1 and drop its six-times-weekly Amsterdam-London flights.

On its domestic network, the airline plans to cut frequencies to Morotai in North Maluku, Bima in West Nusa Tenggara, and Maumere in East Nusa Tanggara. Kurniansyah said the airline is also reviewing several other domestic routes operated by Garuda’s wholly owned subsidiary, Citilink.

“Operating cost on domestic flights, especially to the remote parts of Indonesia, had increased significantly with the escalating price of fuel and the government reducing the price of economy-class airfare by between 12 and 16 percent,” Kurniansyah noted.

The government spun off Citilink as a low-cost carrier in 2012. In November 2018, Garuda took over the operations and financial management of Sriwijaya Air, another subsidiary.

After a major debt restructuring in the early 2000s, Garuda embarked on a five-year fleet and operational modernization exercise in 2009 known as Quantum Leap. It involved branding, livery, new uniforms, and a marketing revamp in international markets, particularly Europe.

Garuda pays a hefty sum of $267.73 million a year for aircraft leases. Despite the planned scale-down, Garuda has projected a profit of about $14 million for 2019, an improvement over the $810,000 it earned in 2018.

The airline operates a fleet of 147 aircraft, including ten 777-300ERs, 13 Airbus A330-300s, nine A330-200s, 81 Boeing 737-800s, 18 Bombardier CRJ 1000s, and 16 ATR 72-600s.  

Garuda’s also has taken a single 737 Max 8 from an initial order of 50. It canceled delivery of the remaining 49 following the model’s March worldwide grounding.

The airline is contemplating converting its order to positions on 737 Max 10s and 787 Dreamliners.