Airline News
Garuda cuts capacity again
January 13th 2015
Garuda Indonesia plans to decrease its overseas flight frequencies and trim the number of business class seats on its aircraft to cut is operating costs following US$206.4 million in comprehensive losses during the first nine months of 2014. Read More »
Among the flight frequencies to be reduced are its Jakarta – Haneda, Denpasar – Haneda, Jakarta – Narita, Denpasar – Narita and Denpasar – Brisbane routes, Garuda’s newly-installed president director and chief executive officer, Arif Wibowo, said at a Jakarta press conference. The reductions mark a departure from previous statements that said it would increase its presence in Japan in 2015. Also plans to better utilize its growing fleet of B777-300ER aircraft, initially acquired to support its long-haul ambitions into Europe, have since been shelved. Wibowo said Garuda will operate more B777s to the Middle East on account of the rising number of locals travelling to Saudi Arabia to perform “umrah” (minor haj). The airline had unveiled a new first and business class product on the B777, which most analysts said was a strategy mis-step.
Garuda will cancel a planned route between Jakarta and Nagoya this year. Instead, Wibowo said the airline would expand its network in China to cater to the increasing demand from inbound travellers. He said the airline, which only serves three destinations on the Mainland, was looking at launching flights to Chengdu, Chongqing, Ningbo, Kunming, Jinan, Harbin, Shenyang and Xian.
Analysis conducted at the airline showed that its business class load factor was “an average 40-50%” only. Garuda will reduce the number of premium seats on its fleet starting with the B737-800, which will reconfigure the premium cabin from 12 to eight seats. With more economy seats, Garuda hopes to lower that cost per seat to better compete with the (low-cost) competition.
