Garuda to lease 12 new aircraft

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.