Garuda Reduces its Presence in London but Still Sees Potential to Growth

Indonesia national flag carrier Garuda Indonesia is obviously struggling to become profitable on its European routes. The carrier which has been flying back to Europe for the last five years -first to Amsterdam and then to London- is struggling to carve a niche due to heavy competition from Middle-East carriers. Currently, six carriers from the Middle East as well as Egyptair and Turkish Airlines fly out of Jakarta providing 103,000 seats per month with possible connections to at least two dozens of cities in Europe. By comparison, Garuda Indonesia provide per month 15,000 seats on average. The large number of seats to and from Indonesia by Gulf carriers put pressure on fares and yields.

Garuda Indonesia is then reducing its capacity to London. Since the end of October, the Indonesian carrier reduced its operation to the UK. It now operates 3 weekly Jakarta – Singapore – London Heathrow – Jakarta route instead of five times a week. The three weekly flights will be maintained during the entire Northern winter season according to Garuda management. Flights are operated by a three-class Boeing 777-300ER. The airline will however operate 4-5 weekly flights during the peak season from December 14, 2016 to January 5, 2017.

According to Garuda Indonesia President director Arif Wibowo, occupancy rate for Garuda flights to London had increased from 50 percent in the first three months to 70 percent.

Despite the “not-so-rosy” business operational perspective for the Indonesian carrier, Garuda President Wibowo signed last week in Jakarta an agreement with the UK government, represented by UK Ambassador to Indonesia Moazzam Malik, expressing hope that the official cooperation will help boosting passenger growth to 5% per year.

“Our traffic is 40,000 passengers per year, if we could surpass 50,000 per year, that would be good,” Arif said to Antara News Agency. Arif said the one-year cooperation expanded the business sectors to not only tourism but also education and trade.

“We look first at tourism, to boost travelling to the UK interesting and vice versa. We also see potential for travel with educational purposes for Indonesians keen to learn speaking English in the UK” he said.

Arif said Garuda had improved its traffic potential since last year by opening direct flights from Jakarta to London Heathrow instead of Gatwick airport.

Indonesian Ambassador Moazzam said tourists from the UK to Indonesia reached 300,000 people a year with the perspective to see one day one 1 million of UK travellers visiting the archipelago.