Garuda joins SkyTeam, targets more passengers

JAKARTA. National flag carrier PT Garuda Indonesia Airlines has officially joined the global airline alliance, SkyTeam, boosting its access to the alliance’s 1,064 destinations in over 170 countries around the world.

Garuda Indonesia president director Emirsyah Satar said that the airline had taken a giant leap by becoming a SkyTeam member, as the airline could be connected to routes belonging to other SkyTeam member airlines, including KLM Royal Dutch Airlines, Air France, Kenya Airways, Korean Air, China Airlines, Air Europa and Delta Airlines.

“Given that Garuda has a strong network position in Australia and Southeast Asia, we believe that we are also able to offer an extensive network of 40 unique destinations that ideally complement SkyTeam’s global network,” Emirsyah said during the signing ceremony on Wednesday.

Meanwhile, SkyTeam managing director Michael Wisbrun said Garuda strengthened the alliance’s presence throughout the Asia-Pacific region with its 588 million global passengers.

“SkyTeam aims to boost its members’ competitiveness by strengthening network and hubs, enhancing its global footprint, improving customer experience and introducing innovative initiatives that enhance customer benefits,” he said.

Emirsyah said that by joining SkyTeam, the airline expected an additional 3 to 5 percent in passenger growth added onto the current existing target of 24 million in 2014.

“However, I don’t think this will immediately have an effect this year, because it takes time, as we have to work together with other airlines. Probably we will start to see the effect in 2015,” Emirsyah told reporters, adding that the airline’s passenger total rose 22.3 percent to 20.4 million in 2013.

The airline’s entry into SkyTeam is part of the flag carrier’s continued push into the premium travel market. Garuda committed to join SkyTeam in 2010, and had since fulfilled all the necessary entry requirements, Emirsyah said.

“In terms of the cost and benefit, we feel that the benefit is more [than the cost] otherwise we wouldn’t join,” Emirsyah said. “By joining the alliance we are able to expand our network without buying new aircraft. We also get to become global standard.”

Separately, Tourism and Creative Economy Minister Mari Elka Pangestu said that Garuda’s entry into SkyTeam would hopefully boost the number of foreign tourists to Indonesia.

“Three of the members are Chinese airlines, which would boost our connectivity to Chinese tourists, our main targeted group,” she told reporters on the sidelines of the signing ceremony.

The ministry expected to see the number of foreign tourists reach 9.5 million this year, an increase from 8.6 million last year.

The minister also said that Garuda’s membership in the alliance has opened the door to the country’s tourist destinations.

“Garuda provides flight to Labuan Bajo [East Nusa Tenggara] as well as Sorong [West Papua], which is the door to Raja Ampat [diving spot]. We are hoping that this membership will ease foreign tourists in traveling to other destinations beyond Bali,” she said.

In 2013, Garuda saw net profits fall to US$11.2 million, down 89.9 percent from $110.8 million in 2012. The airline’s operating income decreased 66.4 percent to $56.4 million compared to 2012 when it recorded operating income of $168.1 million. The decline in profits last year was mainly due to a weaker rupiah and the airline’s huge spending on developing its subsidiary, PT Citilink Indonesia.