Garuda to focus on Indonesian premium market

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Garuda Indonesia will position itself in the medium and higher end segments of the country's domestic market, leaving subsidiary Citilink to take on the low-cost and budget carriers.

Emirsyah Satar, President and CEO of Indonesia's flag carrier, says that the market will continue to grow and will be big enough for the various competing airlines.

"We now have 53 million passengers a year, and that should grow to 90 million by 2014. That is a big market," he adds

"Garuda is positioned in the medium and upper segments, that is our strength. Most of the other players are in the low-cost or budget segment. We will use our subsidiary Citilink to serve the low cost and budget market. That will be our main strategy."

Satar said earlier this year that Garuda plans to order 20-25 new aircraft for Citilink after its initial public offering. The carrier is considering the Airbus A320, Boeing 737-700/800 and the Bombardier CSeries, with the aircraft to be delivered within four years of the order.

Nonetheless he conceded that the 737 is the lead contender given that Garuda itself operates the type. Citilink, in the interim, will take over the older 737s that Garuda is replacing with its 737-800s, enabling the subsidiary to expand with a low investment.

Garuda itself aims to grow its fleet to 115 aircraft by 2014, up from 90 now. It expects to have 2,000 domestic flights weekly and 1,200 international weekly by then. It also plans to rationalise its aircraft types, using Boeing 777-300ERs for the long-haul services, Airbus A330-200/300s for medium haul, and Boeing 737s for domestic and some regional services.

Next year, the carrier plans to begin services to Taipei, New Delhi and Mumbai out of Jakarta. This is part of a plan to gradually reach most Asian cities directly in the medium term.

The airline began European services in June, after the EU lifted its ban on it, with flights to Amsterdam via Dubai. It plans to add Frankfurt, London, Paris and Rome to its European network in the coming years.