Determined Garuda aims for the top
Garuda faces an uphill struggle to restore its reputation and become a top-tier Asian airline, writes William Dennis.
Garuda Indonesia is striving to be counted among Asia’s top-tier carriers by 2014 and to become the region’s preferred airline the following year.
Despite success in its efforts to improve safety standards, Garuda’s President Director Emirsyah Satar says the airline is haunted by its past reputation and still has much to do to repair the damage. Rebuilding a brand is more difficult than building one from scratch, he adds.
Garuda has embarked on a public relations campaign to clean up its tainted image in Australia – the carrier’s fourth-largest market. Emirsyah admits Garuda has had a hard time attracting Australian passengers, although this is slowly changing as the carrier promotes its achievements and the improvements it has made.
Emirsyah was appointed to his current position in 2005, with a mandate to turn Garuda from a debt-riddled airline with a poor record on safety, into a profitable carrier attracting passengers worldwide. At the time, the airline was in no financial position to even lease an aircraft without the approval of its creditors.
Garuda faces intense competition on services between Indonesia and Australia, as the market is now dominated by low-cost carriers AirAsia, Jetstar and Pacific Blue, as well as Australia’s Qantas. The routes have historically attracted mostly leisure traffic but Emirsyah says there has been an increase in business traffic to Jakarta over the past two years.
The Indonesian flag carrier operates to Melbourne from Jakarta and Bali, to Sydney from Jakarta and to Perth from Bali.
Garuda was hurt by the 2007 ban on 51 Indonesian carriers operating to the European Union (EU), imposed after a series of fatal accidents involving the country’s airlines – including the flag carrier. In March that year a Garuda Boeing 737-400 crashed on landing at Yogyakarta, killing 21 of the 140 passengers on board and triggering the EU sanctions.
The ban was lifted from the airline, along with three other Indonesian carriers, in July 2009. Garuda then began a complete image overhaul, which included changing the airline’s livery, uniforms and logo.
Emirsyah says Garuda had to work hard to convince the EU that it had improved standards sufficiently to lift the operating ban, a move which was crucial for the airline. Garuda has invested millions to upgrade safety, and is to date the only Indonesian carrier to obtain IATA Operational Safety Audit (IOSA) certification.
A five-year plan was drawn up to more than double the size of the fleet. The carrier ordered for ten Boeing 777-300ER twin-aisle twinjets, 68 single-aisle 737-800s (including options) and 12 widebody Airbus A330-200s.
Six A330-200s and 48 737-800s have already been delivered. Garuda took delivery in October of its latest 737, featuring the new ‘Boeing Sky Interior’ cabin, based on the manufacturer’s 787 ‘Dreamliner’ cabin. Every seat is equipped with a state-of-the-art audio- and video-on-demand (AVOD) system.
In keeping with the ‘Garuda Indonesia Experience’ service concept launched in 2009, the interior is decorated in traditional Indonesian style, featuring batik seat upholstery and a woven bamboo motif on cabin partitions.
The remaining 737-800s will be delivered through to 2015 and will all feature similar interiors. The ‘Quantum Leap’ transformation program initiated in 2009 will see Garuda’s existing fleet of 89 aircraft expanded to 154, with an average age of five years – down from eight years in 2010.
By 2015 Garuda expects to be carrying 35.2 million passengers a year, up from 12.5 million in 2010. Nineteen 737-300/400/500s and three 747-400s will be gradually phased out of service as new aircraft arrive.
One 777-300ER, two A330-200s and six 737-800 airliners will be delivered in 2012. The 777, scheduled for delivery in February will be deployed between Jakarta and Amsterdam – a route currently operated daily by smaller A330-200 aircraft, with a technical stop in Dubai. The remaining nine 777s will be delivered on a staggered schedule through to 2016.
Garuda operates from three hubs, Soekarno-Hatta International Airport (HIA) in Jakarta, Ngurah Rai International Airport in Denpasar and Hasanuddin International Airport (HIA) in Makassar. Making Makassar a hub is part of the airline’s domestic network expansion strategy and also in tandem with the national ‘Six Economic Corridors’ development programme.
Garuda hopes to tap increasing demand for passenger travel to and from Makassar, as well as stimulating the local economy in turn. The provincial capital of South Sulawesi is fast becoming an important business location in the eastern region of the archipelago.
The carrier is already offering flights from the city to Singapore and Balikpapan using 737-500 aircraft.
Medan will be become the airline’s fourth hub after the opening of the Kuala Namu International Airport. Construction of the facility, which has already been delayed more than a year, is expected to be completed in late 2012.