Speaking to Garuda Indonesia CEO Emirsyah Satar (above) in Jakarta, I was struck by the transformation underway at the carrier.
An airline was once famous for flying dodgy aircraft and dodgier service now operates dozens of new Airbus A330s and Boeing 737-800s (below). The in-flight experience and service is comparable to some of the best in the business.
After coming close to bankruptcy several years ago, Garuda has returned to profitability and significantly pared down its debt. It has shaken off government interference in the management, and employees are assessed, paid and promoted based on performance and not seniority.
Satar and his team have made enough progress to begin resuming flights to Europe and building up their airline's network, join the SkyTeam alliance and hold an IPO (albeit with some controversy over the amount that was targeted and actually raised).
Sure, there are several issues that they have to overcome. There are still delays to flights, leading to frustration among many of its customers. The competition is intense, and there are other airlines offering a good product and in-flight service as well. It is still not clear if the airline will continue to be as profitable if oil prices keep creeping up.
Yet, the lesson from Garuda is this: if all of the stakeholders - the government, the management, and the employees - can buy into the idea that a state-owned airline must be fundamentally restructured for it to be successful, they give it a better than fighting chance of surviving. Satar and Garuda have done just that.
Of course, having an energetic, charismatic and hands-on CEO like Satar helps. After talking to him, the difference between Garuda and other troubled state-owned airlines like Air India is even starker. There are numerous lessons that the guys from Mumbai can take away if they visit their friends in Jakarta.
We spoke to Emirsyah Satar for the cover interview of the next issue of Airline Business, which comes out next week.
Leave a comment
Want a user picture? Get a Gravatar!