Garuda to lease 12 new aircraft

Rendi A. Witular, Jakarta

National flag carrier Garuda Indonesia will lease 12 additional aircraft between now and 2005 to support the expansion of its budget service Citilink and to counter the tight competition in the local budget airline market.

Garuda spokesman Pudjobroto said the 12 aircraft would be short-haul Boeing 737s and would be used to expand Citilink services in western and central parts of Indonesia.

"Currently, Citilink services are focused on cities in the eastern part of the country. But now we are expanding toward the west because of the huge market potential there," said Pudjobroto during a seminar on Friday.

Pudjobroto did not say from where Garuda would lease the planes or the cost.

He only said that of the planned 12 aircraft, Garuda was expecting seven of them to arrive this year, while the remaining five would arrive next year. The planes were expected to replace five Fokker aircraft currently operated by Citilink.

Citilink Garuda was launched in 2001 as Garuda's domestic budget service. The airline currently operates five Fokker aircraft and three Boeing 737s to 11 destinations.

Garuda has been facing tough challenges at home from a posse of relatively new budget airlines, particularly Lion Air. The increasing competition has benefited customers as flying to various parts of the archipelago has become much more affordable.

Pudjobroto said that the size of the domestic budget market was projected to grow by 35 percent this year, higher than the forecast growth for the middle and high ends of the market.

The total number of airline passengers in the country this year is projected to grow to 20 million compared to 16 million last year.

Garuda had previously said that it planned to focus the Citilink service on the middle to lower end of the market, while Garuda itself would concentrate on serving the middle to upper end.

Garuda's current fleet comprises 54 aircraft serving 21 domestic and 22 international destinations. International operations account for 55 percent of Garuda revenues, while domestic operations account for 45 percent.