Home' Asian Aviation : AAV_May2012 Contents 18 AsianAviation | APRIL 2012
2006 was pretty much a consolidation year, as
the carrier s business was effectively downsized and
yields were improved. "We closed a lot of routes and
returned ten aircraft to lessors," recalls Pak Emir. -
"Luckily the lessors did not penalise us a lot. I told
them once we grow again, we will ask them back -
which is what is happening now - right now they re
really supporting us."
2007 was what Pak Emir calls a 'rehabilitation year .
"After you ve been knocked out, you ve got to walk
slowly. We started improving services and our fleet."
And for the next two years, the focus was on
getting the airline back up to speed. "This was the
turnaround stage. We looked at improvement of
product and services - with a limited budget - we
were not rich yet. We started ordering aircraft again."
With the carrier competitive once again, thoughts
turned to an initial public offering (IPO). The initial
target was 2010, but with the weakness in the general
market saw that moved to February 2011. "So we
were late, but not that late. We d been very disciplined
in terms of following what we wanted to do."
Pak Emir sees this as a major milestone for the
company. "It meant the company has to be transparent,
everybody has to behave accordingly - management,
shareholders - that s where we are now."
GOING TO PLAN
Since the IPO, the share price has put in a lacklustre
performance, but for Pak Emir the important issues
are more strategic. "In my eyes, I said at the time
couldn t care about price - as long as we get
US$350 million US$. I guess at that time, the pricing
was a little on the high side, for many reasons. But
as far as I m concerned, we have a prospectus that
we share with investors, and we re executing what s
in that prospectus - that s our job."
The airline s fleet has evolved along with the
transformation - again from a low starting point.
"Initially we had too many types." For long-haul, the
carrier will focus on the 777-300E R, which will start
coming into the fleet next year. "We re not going
bigger than the 777 - currently the airport is just not
supporting anything bigger," notes Pak Emir.
For medium haul, the focus is on the Airbus A330,
with the 737-800 serving short-haul routes. It will be
supplemented by the Bombardier CRJ1000 - the
carrier ordered 18 at the show (of which six will
be leased) and has a further 16 options. By 2015,
Pak Emir says the carrier will have 25 CRJ1000s
in the fleet.
They will be used to serve third-tier hubs, such as
Mekassar, Medan and Balikpapan. "There are routes
where the yield is good, but there isn t too much
demand, so 90 seats is good. The 737-800 has 162,"
notes Pak Emir.
Garuda also looked at the Embraer 190, but
opted for the Bombardier model in a hotly-fought
contest. "We looked at economics, operating costs,
acquisition costs, comfort, reliability. Of course,
Bombardier did not win in all these factors, but we
gave each points and Bombardier came out on top,"
says Pak Emir. "in terms of passenger comfort, the
E-190 its wider, but there s a trade off in economics
as the aircraft is heavier, so you just have to make a
call on that."
There is plenty more campaigns for aircraft
manufacturers going forward, Pak Emir says. "In the
next one or two years we ll compare the A350 and
787. We also have to compare the Max with
the [A320]neo" Garuda has traditionally been a 737
operator, but by 2015 its low-cost offshoot Citilink
will have 50 A320s, up from ten today.
A lot depends on what Boeing comes up with. "If
the MAX is a totally different aircraft, we might as well
compare with the neo. And by that time Citilink will
have 50 A320s. We can compare."
All this will bring the fleet up to 194 units by
2015. There will be nine 777-3 00E Rs, 24 A330-
200s/300s, 83 787-8 00s, 25 CRJ1000s, three
A330F freighters - plus the 50 A320s for Citilink.
The carrier is also interested in turboprops, either
ATR72s or Bombardier Q400s, for thin regional
routes. Indeed, regional aircraft will form a key part
of Garuda s growth plan.
With Jakarta Airport years behind the country s
traffic growth curve, Pak Emir plans to make
maximum use of other airports. "We re not just going
to concentrate aircraft in Jakarta or Bali. We re going
to have base stations in other cities. Meaning that
cabin crew and pilots based in those cities."
Internationally, after all the effort to get back into
Europe, the economic crisis there has meant the
Amsterdam service has been cut from daily to four
times a week, and expansion is on hold. "Why should
we go there when the Asia-Pacific is the centre of
gravity," asks Pak Emir.
Services are being added to China, where the
carrier is looking at Chengdu and Chongqing
as possible destinations. Australia is also a key
target market - with Brisbane and Adelaide under
consideration, and the carrier has also signed an
MoU with Christchurch in New Zealand.
There will be plenty of airport marketers knocking
on Garuda s door over the next few years as the
carrier joins the exclusive club of world-class Asian
flag carriers, where it belongs.
"If the 737MAX is a totally different aircraft, we might as well compare with the
A320neo. And by that time Citilink will have 50 A320s. We can compare."
QUALITY OF AIR
Scale of 1 (poor) to 7 )good
Source: World Economic Forum.
Note: Indonesia was 63rd out of 125 countries
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