Citilink considers international services to cut costs

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Citilink may launch international services next year as part of an effort to cut costs and reduce its recent financial losses.

After it was spun off from Garuda Indonesia into an independent subsidiary last year, Citilink posted a net loss of $39.1 million in the first half of 2013. In comparison, the airline recorded a full-year net loss of $28.4 million in 2012.

As it seeks to reduce the losses, the carrier may launch international services as early as 2014, to destinations such as Kuala Lumpur and Singapore. This will increase the length of routes that it operates and also boost its aircraft utilisation, says chief executive Arif Wibowo.

Although Singapore and Kuala Lumpur are already well served by Garuda, the airline believes that there is enough difference between the two carriers' products to prevent it from cannibalising its parent company.

“As we do not provide the frills, [and] impose various conditions such as limited baggage and paying for meals, this is different from the full service carrier model,” says Wibowo.

Flightglobal's FlightMaps Analytics shows that within Southeast Asia, competitors such as Indonesia AirAsia, Lion Air and Tigerair Mandala operate services to Bangkok, Kuala Lumpur and Singapore from major Indonesian cities such as Denpasar, Medan, Jakarta and Surabaya.

When asked if the carrier would consider launching long-haul, low-cost services, Wibowo says that he sees the potential for such services to be operated to the Middle East, but it is not something that the carrier is actively looking at.

"Since we only operate [Airbus] A320s where it operates at a maximum of 3.5h of flight time, for long-haul, we have not considered the possibility," he adds.