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Garuda Revamps Fleet With Airbuses
Muhamad Al Azhari | August 09, 2011

A model of an Airbus A320neo on display at the Paris International Air Show, where Garuda and Airbus struck the deal.  AFP Photo/Eric Piermont A model of an Airbus A320neo on display at the Paris International Air Show, where Garuda and Airbus struck the deal.  AFP Photo/Eric Piermont
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Garuda Indonesia has finalized the order for $2.13 billion in Airbus aircraft, which will add 25 new planes to its fleet, the airline’s chief financial officer said.

The announcement confirmed an agreement made in June between Garuda and Airbus at the Paris Air Show. The 25 new Airbus A320s, including 10 fuel-efficient A320neos, will replace the Boeing 737-300s and 737-400s currently flown by Garuda’s low-cost unit, Citilink.

Citilink currently flies five 737s and is expected to receive the new Airbus planes in early 2014. Garuda is expected to announce its engine selection for the purchased aircraft in the near future.

“Each plane is tagged at $85 million,” Garuda chief financial officer Elisa Lumbantoruan said. “We may get a discount [once the lessor is appointed] but we cannot disclose that.”

The purchase will be conducted through lease transactions.

Emirsyah Satar, president director of Garuda Indonesia, said at Berita Satu Media Holding headquarters on Monday that management expected to boost Garuda’s revenue from Citilink from a single-digit rate to 30 percent.

“This order will ensure that Citilink is equipped to realize its full potential,” Emirsyah said.

It has stated a goal of more than quadrupling the number of people who fly with the carrier in the next four years with new routes and new aircraft.

New overseas destinations will include Singapore, Thailand, the Philippines, Malaysia and Australia.

“We are confident that these modern, eco-efficient aircraft will enable us to win an important share of the fast-growing budget market in Indonesia, while providing our passengers with a high quality product,” he added.

As Garuda increasingly targets middle-to-upper-income consumers, Citilink is competing with other low-cost carriers like local airline Lion Air and AirAsia of Malaysia.

John Leahy, chief operating officer for customers at Airbus, said in a statement that he was pleased to welcome Garuda Indonesia as a new customer for the A320.

“Citilink will benefit from the proven reliability, passenger appeal and low operating costs that make the A320 Family the single aisle market leader,” he said.

Emirsyah predicted last week that the number of passengers traveling on Citilink would reach 8.3 million in 2015, from an estimated 2 million this year.

Garuda aims to carry 35 million passengers in 2015, including those flying with Citilink. Last year, Garuda alone carried 13 million passengers and more than 200,000 tons of cargo with a fleet of 86 planes.

The airline plans to add 68 aircraft in the next four years, nearly doubling its fleet.