Garuda could expand fleet through leases to meet rising demand

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Garuda Indonesia's chief executive says that the airline could look to lease more aircraft to meet the demand of the growing Indonesian market.

"At the end of this year, Garuda, excluding [low-cost subsidiary] Citlink, will have 110 aircraft," says Emirsyah Satar. "The target by 2014 is going to be about 136, that is our first estimate which is already locked. We might increase it if we see the opportunities."

When asked if it meant that the airline was looking to add more aircraft on operating leases, he says: "We might, but we will face issues regarding the pilots."

Instead, he says that it would be easier for Garuda to add more wet-leased aircraft to relieve its capacity issues. Garuda recently ended a three-month wet lease of an Air Austral Boeing 777-300ER that was used for services to Jeddah in Saudi Arabia.

The airline recently took delivery of its first 777-300ER, and plans to have four in operation by the end of the year. Two more will arrive in 2014 and the remaining four will be delivered in 2015.

However, Emirsyah says that the carrier would like to bring forward the delivery of some of those aircraft to allow it to expand its long-haul network more quickly.

In light of the need for capacity, he says that Garuda is considering how it will utilise its two Boeing 747-400s as the carrier's regular services to Jeddah are being taken over by the 777s. The 747-400s, which were delivered in the mid-1990s, are the oldest in its fleet.

"We're not really going to ground that aircraft," says Emirsyah. "We need the capacity and the market is there."