Garuda Indonesia chief executive Emirsyah Satar believes that there will be even more consolidation among the country's airlines.
"We see that the airlines will consolidate, and that there will be a few big players. Size matters in terms of efficiency," says Satar in an interview with Flightglobal Pro.
Earlier this year, Batavia Air ceased operations and went into bankruptcy after lessor International Lease Finance took action in Indonesian courts to recover the debts owed from the lease of two Airbus A330s.
The airline also made losses as a result of stiff competition in the low-cost market segment, where it was up against Garuda's subsidiary Citilink, Indonesia AirAsia and Tiger Airways' associate Mandala. Full service carriers such as Garuda, Sriwijaya and Merpati also competed with it in the domestic market.
Local carriers also face infrastructure and capacity issues at the country's airports, adds Satar. Smaller carriers in Indonesia have echoed that view, saying that such issues limit their ability to serve the most lucrative routes.
"Infrastructure is a challenging thing for airlines. We've got the market, the demand. But is there capacity and the infrastructure to support that?" says Satar.
He adds that airport operators Angkasa Pura I and II are building and expanding airports, but the growth in passenger numbers is so rapid that expansion may again be needed once those works are completed.
"The market is growing, Garuda is growing. The key is to manage it well, control costs and put additional capacity where it will be absorbed," says Satar.
This year, Garuda will receive 24 new aircraft - four Boeing 777-300ERs, three A330s, 10 Boeing 737-800s and seven Bombardier CRJ1000s.