Bringing Garuda to the Big Time

Geraldine Tan

Emirsyah Satar is a man on the go. The president and chief executive of national carrier Garuda Indonesia can be found inking a $2.5 billion Airbus deal one moment and signing an international memorandum of understanding the next.

Despite his hectic schedule, the 52-year-old is steely without any undesirable hard edge. He is focused on the task at hand, and there is none of that chained-to-the-Blackberry malaise that has claimed many an Indonesian — it stays politely out of the way during our meeting. Steadiness, undoubtedly, has helped Emirsyah overhaul Garuda after taking the helm as one of the youngest airline CEOs in the Asia Pacific in 2005.

Ready for takeoff

Emirsyah is, by now, no stranger to many Indonesians, having had a major hand in pulling the country’s once-beleaguered national carrier out of the doldrums.

The University of Indonesia accounting graduate started his career as an auditor at PricewaterhouseCoopers, before taking on key roles at Citibank, the Jan Darmadi Group and Niaga Finance in Hong Kong. He returned home to become executive vice-president for finance at Garuda Indonesia in 1998, playing a major role in the airline’s $1.8 billion financial restructuring in 2001. New York-based Travel Finance magazine named it the “Financial Restructuring of the Year.”

He left in 2003 for Bank Danamon but was soon asked to return to Garuda and take the reigns of a struggling enterprise that was headed south. Where some may have turned down the request in favor of staying in their comfort zone, he says, he saw it as “a great opportunity to do something.”

He accepted the job in March of 2005. “My previous experience really helped me in terms of leading a business,” Emirsyah now says. “As a corporate banker, when you evaluate a company, you must understand its industry, its market, and how that company conducts business.

“That has really helped me at Garuda — I may not be an expert at everything about the industry, but my training taught me to identify the critical points in an issue,” he says, adding that his background in accounting enables him to read numbers quickly and identify areas that need work.

The experienced financier says he has also cultivated a strong work ethic. “When you are the CEO, the buck stops here. You can’t pass a difficult decision on to anyone else.”

“I’ve learned not to leave anything hanging,” he adds. “Make a decision and make sure it’s for the best of the company. If it turns out to be wrong, correct it. But never leave it hanging.”

Laying foundations for success

Garuda today is a revitalized company, both financially and operationally. It went public last year and has largely been released from the government’s grasp: Employee salaries and promotions are now linked to performance and not seniority, new aircraft and routes are being introduced and most importantly, Garuda is in the black.

Emirsyah’s efforts continue; he works internally with the company’s 5,500 employees (the number spikes to 17,000 if subsidiaries are included) and also travels widely to get the word out — about both Garuda and Indonesia — to businesses and governments throughout the region and the world.

“Garuda has a pretty strong brand domestically and regionally,” he says. “The challenge lies in international branding, especially taking into account our history, the financial crisis and the European Union ban.

“There is still a stigma attached to the Garuda name, and I don’t blame them. We need to elevate the brand, and that’s why I travel overseas frequently to meet our corporate customers, agents and the press — so that they know Garuda, as it stands now, is different from the past,” he says, adding that he encourages the company’s board members to do the same.

His hard work is beginning to bear fruit. In 2010, Garuda was named “World’s Most Improved Airline” by Skytrax and “Turnaround Airline of the Year” by the Centre for Asia Pacific Aviation.

The business community has similarly begun to take notice of Emirsyah himself. In 2008 he was elected chairman of the Indonesian National Air Carrier Associations, and he has been a member of the International Air Transport Association since 2010. He is also actively involved in the Indonesian Chamber of Commerce and Industry (Kadin) as vice-chairman for international economic cooperation.

On Garuda’s progress between 2005 and the 2011 initial public offering, Emirsyah borrows an analogy from a game that he used to play frequently — golf. “Initially, we were like a 28-handicapper — someone who has the knowledge of the game, but cannot participate in tournaments because he would slow other players down.

“From there, we transformed and improved, and eventually we became a 16 or 18 handicap. Decent, much better from before, but still not great, and we still needed to work on consistency.”

After years of losses, Garuda returned to the black in 2007 and profits have continued to increase since then. Emirsyah recalls two other milestones from those years — first, the lifting of the EU ban on Garuda in 2009. The company had been tarred with the same brush as other smaller carriers in the country with dubious standards. “The issue was with our country, not Garuda,” he says. “We balanced each party’s needs and worked with the regulator to provide the right kind of support to get the ban lifted.”

The second, he says, is the IPO. “In the run up to the IPO, when I talked to my seniors, colleagues and associates about it, everyone doubted it and didn’t believe that we could be listed. But we proved them wrong.”

Gearing up

He is now working on refining Garuda’s game, so to speak.

“With our Quantum Leap program, we are moving towards becoming a single handicapper, which is a totally different game. If you want to play at that level, in the big leagues, you must have a lot of focus. You have to be dedicated, observe how good players play and put in the practice. You must have the proper systems in place to help you succeed.”

In the near future, Garuda staffers will work on streamlining processes to position the company for success, developing the right information technology tools to support these systems, and its people. He says: “It won’t be easy, but these three components need to be in place before we can truly be a world-class airline.”

Garuda’s current fleet of 92 aircraft will grow to 194 by 2015, with the first of the new 11 Airbus A330-300 planes expected at the end of this year. This will enable the airline to introduce more medium and long-haul flights. “We will use them to fly to Japan, Korea, Australia, New Zealand, and Asean countries,” Emirsyah says.

Another possibility is the Middle East, and there has been talk of Italy, Germany, France and the United Kingdom. Joining global airline alliance SkyTeam will further boost Garuda’s international reach and enhance its offerings for customers.

On board the aircraft, Emirsyah is looking to harness Indonesian diversity and warmth for top-flight inflight service. “The hardware — lie-flat beds and the like — are easy, they just need to be ordered and fitted. But other airlines will also have the same things. With the Garuda Indonesia experience, we have something that no one can copy.”

As a middle class emerges all over the archipelago and consumer demand surges, Garuda is well-placed to grow as Indonesia’s economic outlook continues to improve. “When people talk about opportunities in the Asia Pacific region today, they talk about China, India and Indonesia,” observes Emirsyah.

“Doing business here is much better now, I can feel it. Indonesia’s investment grade has improved and a lot of our business partners are praising us.”

But amid the promise, Emirsyah acknowledges that he’s got his work cut out for him. “Nothing is ever perfect and there is always room for improvement, things which can be accelerated, things we can push in the right direction at a faster pace,” he points out. Not to mention the fact that other carriers are also acquiring new planes, improving and growing. But he welcomes the challenge: “I like competition because it makes you creative and innovative.”

“It’s also good for the company, because it forces us to be energetic, to work hard to keep the Garuda spirit alive,” he says.

An extended version of this story will appear in the May issue of The Peak.