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Garuda signals Europe network cutbacks

Garuda Indonesia is signalling that it will cut back its Europe presence in a bid to reduce its losses.

Carrier chief executive Ari Askhara recently told a parliamentary commission recently that flights to London will end in August, and that frequency to Amsterdam will be halved to thrice-weekly.

Flights to Bima, Maumere, and Morotai will see also frequency reductions as fuel costs to these destinations are said to be "80% higher" than on other domestic routes.

Askhara explains the carrier was forced to end the London flights as the route could not be sustained without subsidies. Two other routes, Denpasar-Mumbai and Tanjung Pandan-Singapore, also saw similar fate.

A subsidy to support the new route launches also did not materialise as expected.

"Those routes were closed as the Rp8 billion ($555,700) subsidy promised by the Ministry of Tourism did not materialise," says Askhara.

Cirium schedules data shows that Garuda operates three flights per week on the Jakarta-London Heathrow-Denpasar route, and six flights per week on the Jakarta-Amsterdam sector. Both services are operated using Boeing 777-300ERs.

Local media reports quoting Garuda's commercial director Pikri Ilham Kurniansyah as saying that the carrier will review its domestic network, following the country's recent decision to lower the price ceiling on domestic air tickets by up to 16%. The price ceiling reductions was made due to public concerns about the higher cost of fares in recent months.

In response to FlightGlobal's query on Askhara's comments to the commission, Garuda would only say that it is evaluating a number of options for its network, including route closures and frequency reductions.

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