Garuda Indonesia to expand fleet on higher demand

JAKARTA. Publicly listed national flag carrier Garuda Indonesia aims to expand its fleet to 169 aircraft this year as its flight network grows ever larger thanks to increased demand for air travel.

Garuda Indonesia president director Emirsyah Satar said on Wednesday that the airline expected to carry up to 30 million passengers in 2014 after it flew around 25 million in 2013.

“We are expecting a 15-20 percent rise in passenger demand in 2014,” Emirsyah told a press conference, as quoted by Antara news agency.

“We will [also] expand our fleet to 169 aircraft in 2014 from 140 aircraft as of the end of last year,” he added.

He said that 117 of Garuda Indonesia’s current aircraft were on lease while 23 others were owned by the carrier.

Thirty of the airline’s aircraft are operated by Citilink, 25 of which are on lease and the remainder owned by the carrier.

Emirsyah said that the average age of its aircraft was 5.8 years in 2012, a decline from 6.5 years in 2011.

“We expand our fleet prudently, based on growth,” Emirsyah said.

Earlier, Garuda Indonesia announced that it was eyeing 1.5 million GarudaMiles (the replacement of Garuda Frequent Flyer/GFF) card holders by mid-2014.

“After officially becoming a member of the SkyTeam alliance, we will provide more service facilities through the GarudaMiles card,” Emirsyah said.

SkyTeam is an alliance of 20 elite airline companies from several countries, including Delta Airlines (US) and Air France. Garuda Indonesia officially became the 20th member of SkyTeam on March 5.

Emirsyah said other SkyTeam members could also benefit from GarudaMiles advantages, such as priority boarding, additional baggage allowance and access to 530 airport lounges across the world.

Throughout 2013, Garuda booked US$3.72 billion in revenues, up by 7 percent from the previous year.

However, Garuda’s operating profits declined to $56.4 million in 2013 from $168.1 million the previous year, due to investments it conducted including the airline’s fleet expansion and its program to develop Citilink as an independent low-cost carrier.

Emirsyah said the company’s seat-load factor (SLF) stood at 74.1 percent in 2013, slightly lower than 75.9 percent in the previous year.

“Garuda’s performance in 2013 was heavily affected by the rupiah’s depreciation, Indonesia’s growth rate and investments carried out to increase the company’s position for the future,” he explained.

Among progress achieved in the first quarter of 2013 was Garuda’s flight network expansion to six new destinations in Europe and the Middle East — Bahrain, Brussels, Dusseldorf, Frankfurt, Milan and Munich — all served by Etihad Airways.

In the second quarter, Garuda signed an agreement to finance two B777-300ER aircraft based on Islamic principles. The airline also settled a loan of $55 million to the Citi Club Deal syndicate and another debt amounting $75 million owed to the Indonesia Exim Bank.

The airline carried 90,108 haj passengers in 2013 and won “The Best Airline Haj Season 1434H/2013” from the civil flight authority of King Abdul Aziz International Airport, Saudi Arabia.

Garuda Indonesia’s stocks, traded on the local bourse under the code GIAA, were at Rp 483 on Wednesday.

The stock has dropped 3.4 percent so far this year, under performing the broader benchmark Jakarta Composite Index (JCI), which gained 14 percent. (Elly Burhaini Faizal)