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Garuda and Angkasa Pura Agreement Ends, As of 1 October 2014 Garuda Passengers Pay "Passenger Service Charge (PSC)" at Airport

As a result of the airline’s continuous transformation program, Garuda Indonesia to date has made a number of significant achievements, among them achieved top five-star airline rating, earned the “World’s Best Cabin Crew” title and was ranked seventh in the world.

Spurred by these achievements, Garuda Indonesia will continue to progress into the future, albeit prudently. Plans include enhancing synergy between Garuda and Citilink to achieve optimum business development.

As we all are aware, the aviation industry, in Indonesia and the world in general, is experiencing turbulent times. The weakening of the Indonesian Rupiah against the US Dollar, fuel costs which had reached an all-time high, and regulatory policies that have not been conducive to the industry’s growth, have tremendously affected the performance of international airlines, including Garuda Indonesia.

In light of this condition, Garuda Indonesia is committed to carry out the following strategies, as part of its development:

  • Increase “Revenue Generator”, in which all potentials that may increase the company’s revenue are optimized.
  • Restructure “Cost Driver”, in which Garuda will manage and restructure costs to increase efficiency,
  •  “Refinancing”, in which Garuda implements various measures and strategies regarding financial aspects, to secure the company’s financial condition.

This short-term strategy is found in the Quick Wins program and comprises of three main strategies:

1.    Network Restructuring

Garuda Indonesia will carry out a flight network restructuring with the aim of developing a more solid and concise network that will give Garuda an added edge in the highly competitve airline industry.

Among the various route restructuring measures to be carried out, are:

  • Reduce unprofitable flight routes, such as Jakarta-Haneda (vv), Denpasar-Haneda (vv) and Denpasar-Brisbane (vv).
  • Postpone the opening of new routes, among others Jakart-Nagoya (vv), and
  • Adjust flight schedules to various destination cities in Australia and Europe.

Following the adjustments made on flight routes in Japan and Australia, Garuda will maximize on the resources gained from these adjustments and focus on developing routes in China besides the three major cities currently served by Garuda (Beijing, Shanghai, Guangzhou), as well as  developing market potentials to the Middle East, especially expanding the umrah market.

Some examples of service developments to China are the opening of new routes from Denpasar-Beijing (vv) on 12 January 2015, and charter flights to cities in China, such as Chengdu, Chong Qin, Ningbo, Kunming, Jinan, Harbin, Xian, Shenyang and Chengzhou to Denpasar and Manado (Feb/July 2015)

2.    Fleet Management

Garuda Indonesia will continue to enhance the quality of its service as a “full service airline”, despite adjusting operational costs (unit cost/seat), which would be realized  through a “fleet management” program, such as “early termination” of several aircraft, “subleasing” and adjusting the number of seats in business class in a narrow-body Boeing 737-800NG, from 12 seats in business class to 8 seats, therefore increasing seat capacity in the economy class (attracting a wider market) of up to 15 – 20 percent, and reducing costs (unit cost/seat).

3.    Reduce Overhead

Garuda will also reduce overhead costs up to 10 percent 10 percent by adjusting costs that do not yield any additional value and by increasing employee productivity. For example, Garuda will not increase the number of employees in the event of the arrival of 15 new aircraft in 2015. This way, Garuda will be able to reduce the current aircraft : employee ratio of 1 : 60 to 1 : 50.

As a result of the airline’s continuous transformation program, Garuda Indonesia to date has made a number of significant achievements, among them achieved top five-star airline rating, earned the “World’s Best Cabin Crew” title and was ranked seventh in the world.

Spurred by these achievements, Garuda Indonesia will continue to progress into the future, albeit prudently. Plans include enhancing synergy between Garuda and Citilink to achieve optimum business development.

As we all are aware, the aviation industry, in Indonesia and the world in general, is experiencing turbulent times. The weakening of the Indonesian Rupiah against the US Dollar, fuel costs which had reached an all-time high, and regulatory policies that have not been conducive to the industry’s growth, have tremendously affected the performance of international airlines, including Garuda Indonesia.

In light of this condition, Garuda Indonesia is committed to carry out the following strategies, as part of its development:

  • Increase “Revenue Generator”, in which all potentials that may increase the company’s revenue are optimized.
  • Restructure “Cost Driver”, in which Garuda will manage and restructure costs to increase efficiency,
  •  “Refinancing”, in which Garuda implements various measures and strategies regarding financial aspects, to secure the company’s financial condition.

This short-term strategy is found in the Quick Wins program and comprises of three main strategies:

1.    Network Restructuring

Garuda Indonesia will carry out a flight network restructuring with the aim of developing a more solid and concise network that will give Garuda an added edge in the highly competitve airline industry.

Among the various route restructuring measures to be carried out, are:

  • Reduce unprofitable flight routes, such as Jakarta-Haneda (vv), Denpasar-Haneda (vv) and Denpasar-Brisbane (vv).
  • Postpone the opening of new routes, among others Jakart-Nagoya (vv), and
  • Adjust flight schedules to various destination cities in Australia and Europe.

Following the adjustments made on flight routes in Japan and Australia, Garuda will maximize on the resources gained from these adjustments and focus on developing routes in China besides the three major cities currently served by Garuda (Beijing, Shanghai, Guangzhou), as well as  developing market potentials to the Middle East, especially expanding the umrah market.

Some examples of service developments to China are the opening of new routes from Denpasar-Beijing (vv) on 12 January 2015, and charter flights to cities in China, such as Chengdu, Chong Qin, Ningbo, Kunming, Jinan, Harbin, Xian, Shenyang and Chengzhou to Denpasar and Manado (Feb/July 2015).

2.    Fleet Management

Garuda Indonesia will continue to enhance the quality of its service as a “full service airline”, despite adjusting operational costs (unit cost/seat), which would be realized  through a “fleet management” program, such as “early termination” of several aircraft, “subleasing” and adjusting the number of seats in business class in a narrow-body Boeing 737-800NG, from 12 seats in business class to 8 seats, therefore increasing seat capacity in the economy class (attracting a wider market) of up to 15 – 20 percent, and reducing costs (unit cost/seat).

3.    Reduce Overhead

Garuda will also reduce overhead costs up to 10 percent 10 percent by adjusting costs that do not yield any additional value and by increasing employee productivity. For example, Garuda will not increase the number of employees in the event of the arrival of 15 new aircraft in 2015. This way, Garuda will be able to reduce the current aircraft : employee ratio of 1 : 60 to 1 : 50.

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