Citilink in talks with 'strategic investor'

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Indonesian carrier Citilink is in search of a "strategic investor" that will be able to contribute financially and share low-cost management expertise with the airline.

The low-cost unit of Garuda Indonesia has "informally approached" some potential partners, and is expecting an investment to be made as early as this year, its president and chief executive Arif Wibowo told Flightglobal Pro in an interview in Medan.

He adds that the potential investor will likely be an established foreign airline that does not compete directly with Citilink.

"It will likely be a US or European airline, a strong and big low-cost player," he hints, adding that Standard Chartered Bank is now conducting a valuation of Citilink.

The move comes as the low-cost carrier posted a net loss of $28.4 million for 2012. It now wants a partner who will be able to invest in the airline and also provide "knowledge transfer". Garuda will remain a majority shareholder after the investment, says Wibowo.

"We need the knowledge because we want to look closely at the model for Citilink, to understand better how to run an LCC. I've been in Garuda a long time [before joining Citilink] and sometimes still too much in the mindset of a full-service operator," says Wibowo.

Flightglobal's Ascend Online database shows that the carrier operates 21 Airbus A320s and seven Boeing 737s.