Welcome Guest   |  Login   |   Signup
JG Logo
Thu, May 24, 2012
Archive Search

Waiting for Aircraft Delays Garuda’s Plans
Neil Denslow & Femi Adi | February 13, 2012

Emirsyah Satar, chief executive officer of Garuda Indonesia, speaks during an interview in Singapore on Monday.  (Bloomberg Photo/Kang Li) Emirsyah Satar, chief executive officer of Garuda Indonesia, speaks during an interview in Singapore on Monday.  (Bloomberg Photo/Kang Li)
Share This Page
0
5
0
0
Share with google+ :


Post a comment
Please login to post comment

Comments

Be the first to write your opinion!

Garuda Indonesia, the nation’s largest listed carrier, said it can’t get new Boeing 777 planes quickly enough as it tries to boost yields on long-haul routes.

“We need 777s immediately, but they’re not available right now,” chief executive officer Emirsyah Satar said on Monday in an interview in Singapore, ahead of the city-state’s air show. “Therefore, we cannot really renew our fleet quickly enough.”

The carrier is due to receive the first three of 10 on-order 777s next year, which it will use on routes to Europe and the Middle East. The planes will help Garuda raise fares and lower costs by replacing older 747-400s that are less fuel-efficient and offer fewer features for passengers.

“Indonesians will pay more if they get more,” Emirsyah said. With the 747s, he added, “we really cannot get a good yield, as the aircraft are old aircraft.”

Garuda, based in Jakarta, will also this week sign an order for regional jets produced by Bombardier, a Canadian company, to help bolster operations on smaller islands in Indonesia. The contract will comprise 18 firm orders and 18 options, Emirsyah said. The airline intends to take 25 of the planes by 2015, he said.

The carrier has locked in all of its plane-financing needs through next year using export-credit agencies and lessors, Emirsyah said. It also raised Rp 4.8 trillion ($530 million) in an initial public offering about a year ago.

Garuda is now at looking for funding for planes arriving from 2014, and the “response has been quite positive,” Emirsyah said.

Its shares fell 1.6 percent to Rp 610 in Jakarta trading on Monday. They’ve jumped about 30 percent this year.

Garuda expects to boost sales 21 percent this year from an unaudited total of Rp 27.1 trillion in 2011, as growth stokes travel. The nation’s economy grew 6.46 percent in 2011, the fastest pace since before the Asian financial crisis.

The airline is facing rising competition from low-cost carriers led by Lion Air, which expected to boost passenger numbers 30 percent last year to 27 million. The closely held airline has agreed to a provisional order for 230 Boeing 737 planes worth $21.7 billion at list prices.

Tiger Airways, part-owned by Singapore Airlines, also last month completed the purchase of a 33 percent stake in Mandala Airlines to enter the Indonesian market. AirAsia, the region’s largest budget carrier, already has an affiliate in the country.

Garuda’s own budget arm, Citilink, expects to almost triple sales this year and to more than double passenger numbers to as many as 4 million. The unit is due to receive 11 new Airbus planes this year, roughly doubling its fleet.

Bloomberg