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Recession Prompts Garuda to Turn Its Back on Europe
Faisal Maliki Baskoro | January 24, 2012

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shytallnight
3:15pm Jan 26, 2012

Don't get me wrong, I have flown often on Garuda domestically and it's a pleasant airline, especially for Indonesian standards.

that said, their prices for long-haul are more than Qatar, Emirates and Etihad and similar to Singapore Airlines. Unless they have a very typical (i.e. Only pride dictates flying with an Indonesian carrier) Indonesian customer base, they simply cannot compete.

TGIF
10:05am Jan 26, 2012

What do you mean lowered its frequency? You mean it is not a daily flight or several times a day from Indonesia?? That would probably be it. Some Airlines may have done so and lower fares are sold out very quickly with advanced reservation.


jetset24
9:43am Jan 26, 2012

Reiterate again that some flights to Paris has lowered its frequency with EvaAir...However it is another great airline to use as a connection to Europe from Indonesia. Great service!

jetset24
8:19am Jan 26, 2012

@Buleagung...You are right about Air Asia. Even a reputable airline as EVA AIR has cut the Paris flight and lowered the frequency of flights in and out of Indonesia to Taiwan.

Some people on here are quick to judge again when they hear the word

G A R U D A...LOL

Have they all been on budget airlines such as Easy Jet, Ryan Air or even some US carriers including budget airlines..believe it is no picnic.


buleagung
7:42am Jan 26, 2012

It's not only Garuda cutting services into Europe. Air Asia X recently announced suspension of all services into London and Europe and will concentrate on shorter-haul Asian destinations where demand is growing. From my perspective, a wise commercial decision on Garuda's part, especially as they don't have any long haul aircraft in their fleet so need to use an A-330-200 necessitating a stopover. I am sure the long haul 777's projected into the fleet shortly will be put to good use to further build Garuda's profit base.

Garuda Indonesia is scrapping more than half its flights to Amsterdam and is suspending plans to begin flights to Frankfurt, Rome, Paris and London next year in response to the European slowdown, the airline announced on Tuesday.

But the national flag carrier, which listed on the Indonesia Stock Exchange (IDX) last year, says it plans to increase its flights on more profitable routes in Asia, including to cities in China, Japan and Malaysia.

Pudjobroto, Garuda’s corporate secretary, said the airline would reduce its flights to Amsterdam from seven a week to three a week starting in March.

“The euro zone is still in a recession and has yet to show signs of improvement. This has caused a decline in traffic to and from Europe,” he said.

“The Asia-Pacific market has more potential compared to the European market. By focusing on regional flights, we’re actually boosting our revenue.”

Garuda will open a new route from Denpasar to Tokyo’s Haneda International Airport starting on April 27. This new route will have five flights per week and will replace the Denpasar-Nagoya route, which will close on April 10.

On May 19, Garuda will commence daily flights from Jakarta to Taipei. The airline will also increase its flights from Jakarta to Kuala Lumpur to three per week, up from two a week, starting in February.

Pudjobroto said Garuda was suspending its plan to open new routes to Frankfurt, Rome, Paris and London, which was slated to happen next year.

“As long as the euro zone is still in a crisis, we’re not going to add flights or open new routes to Europe,” he said.

Garuda will also increase the number of flights on domestic routes, such as Jakarta-Pekanbaru, Jakarta-Batam and a new Bandung-Surabaya route, which will start on Feb. 10.

The International Air Transportation Association said last month that this year’s outlook for the European market was bleak. But the IATA said the Asia Pacific would be the best-performing market this year.

Garuda’s chief, Emirsyah Satar, said last month that the airline’s unaudited 2011 net income was forecast to rise to Rp 900 billion ($100 million), up from Rp 516 billion in 2010. Its revenue was forecast to rise to Rp 27 trillion.

Shares in Garuda fell 5 percent to Rp 540 on Tuesday. The shares have fallen 13 percent this year.