Air Transport

Indonesia's Citilink secures five 737s on lease for relaunch

By Leithen Francis

Garuda Indonesia's low-cost carrier Citilink is re-launching on 1 September with two Boeing 737 'Classics' on lease from Aviation Capital Group and in the coming weeks Citilink plans to decide on its future fleet.

Citilink head, Joseph Saul, says the carrier has leased one Boeing 737-300 and one Boeing 737-400 from Aviation Capital Group and will be launching on 1 September.

He also says it has two 737 'Classics' on lease from AerCap coming in October and in January it will receive a 737 'Classic' from International Lease Finance.

But the airline's fleet of 737 'Classics' will stop at five because the airline wants to operate more fuel efficient aircraft and in September or October will decide on an aircraft type, says Saul, who confirms it is considering the Airbus A320 and Boeing 737-800.

The first of this newer generation aircraft is expected to join he fleet in June or July next year and "in the next two months we will start training pilots for these aircraft", says Saul.

The carrier plans to have a fleet of 25-30 aircraft in five years, he adds.

Saul says Citilink has been speaking to Airbus and Boeing but he declines to say if the airline will order some new aircraft or rely solely on leases.

Citilink is a strategic business unit of Garuda Indonesia and even though it will operate under Garuda's air operator's certificate the business has its own profit and loss (P&L) and by 1 January next year aims to get its own AOC, says Saul.

The airline is based in Surabaya, Indonesia's second largest city, and Saul says there is very little overlap between Garuda and Citilink's route network.

He says Citilink will operate independently and there will be no inter-line or codeshare agreements with Garuda.

Citilink is a low-cost carrier that aims to capture market share by having a reputation for safety and reliability and by offering low-fares and having cabin crew who are young and vibrant, he adds.

Its initial launch schedule sees it operating from Surabaya to: Balikpapan, Jakarta, Kupang, Mataram, Batam and Banjarmasin according to details on the airline's online booking engine which was developed by Thai information technology company Tik Systems.

Citilink use to be based in Jakarta but then in January this year Garuda shuttered Citilink's operation saying the business needed to be restructured.

Garuda also tried, unsuccessfully, to find a strategic partner to help re-launch Citilink.

Saul at Citilink says "in the next five years Citilink will be partially privatised but it depends on the government regulations."

He says Citilink is important to Garuda because it gives the national carrier a means to attract price conscious consumers.

This market segment is growing fast and it is hard for Garuda to compete in this segment in its own right because Garuda is a full-service rather than a low-cost carrier, he says.