Garuda subsidiary Citilink to set up third base this year

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Indonesian low-cost carrier (LCC) Citilink wants to set up a third base for its aircraft by the end of 2012.

Major cities such as Medan, Makassar and Denpasar are locations that the airline is considering for its new base, said its vice-president Con Korfiatis at an interview with Flightglobal Pro.

The Garuda Indonesia subsidiary, which now has bases in Jakarta and Surabaya, believes that a third base will make economic sense because of the carrier's fleet expansion plans.

"We want some economies of scale in each base before we start up and if we can get five to six aircraft in a base, that will work. We'll have 20 aircraft by the end of this year and so it gets to the point where you can consider a third base," said Korfiatis.

The airline will be taking delivery of 11 Airbus A320s this year and expects to grow its fleet to 50 A320s by 2015.

It is also working on its spin-off from parent Garuda Indonesia. The carrier received its scheduled commercial air transportation permit this month and aims to get its air operator's certificate (AOC) by April to complete the spin-off.

The team has since launched a new website with a new livery, picked a new uniform for its crew and is working on a new booking engine. This month, it will also move to its own office in Jakarta, away from Garuda's office near the Soekarno-Hatta airport.

Once the spin-off is completed, some of its existing practices, which have to be in line with Garuda's because the two are operating under the same AOC, will have to be re-engineered to ensure they work best for LCCs.

"After that, the main job really is aggressive growth," said Korfiatis.

The airline will be launching five new domestic services this year and intends to start international operations by early 2013.

Initial destinations will likely be those within a three-hour range of Indonesia such as Singapore, Malaysia, Thailand and Vietnam. Australia and China will be included later.

The carrier is also unconcerned that Singapore's Tiger Airways has acquired a 33% stake in Mandala Airlines to help the grounded Indonesian carrier resume operations in April. Instead, it will focus on growth opportunities in Indonesia and on deploying additional aircraft on the right routes.

The Indonesian market grew at 20% per annum for the last five years and is likely to continue growing at 15% over the next five years, said Korfiatis.

"The underlying growth potential is phenomenal. If you take down the 60 million passengers we had domestically in 2011, that number becomes over 100 million in 2015. That needs about 250 additional aircraft in the market over the next four years and someone needs to provide for that growth," he said.