A new restructuring plan for Garuda Indonesia could see the airline stopping most international flights and concentrating only on domestic routes and a few regional destinations. As part of the plan Garuda Indonesia would only serve overseas markets through codeshare flights with other carriers.
Garuda Indonesia has a debt of some $9.5 billion and needs to get back into profit to continue to carry the title as Indonesia’s national airline. In a recent interview with US news website Bloomberg, Indonesia’s State Enterprises Minister, Erick Thohir, revealed new plans for a restructured Garuda Indonesia, which could begin in 2023.
According to Thohir, as part of the restructure the carrier would focus on domestic routes in the premium market selling business class, a future economy premium and economy class seats. The airline would terminate its first class services, which were mostly available on overseas routes. Garuda Indonesia current domestic network comprises 51 destinations across the entire Indonesian archipelago.
Presence overseas through renewed and expanded codeshare agreements only
Overseas routes would be largely reduced with Garuda Indonesia flying to only a handful destinations. That would include regional routes to Bangkok, Kuala Lumpur or Singapore compared to a current network of 16 destinations in Australia, China, Japan, Korea, Malaysia, Saudi Arabia, Singapore and Thailand as well as to Amsterdam. The carrier would stop flying long-haul destinations and instead code-share with partners. In November 2021 Garuda Indonesia signed an extensive codeshare with Emirates in Dubai.
The partnership allows customers of the flag carrier of Indonesia to enjoy seamless connectivity on new routes across the Americas, Middle East, Africa and Europe via Dubai and Jakarta. This includes codeshare flights across 18 routes on both airlines’ networks. Direct flights between Dubai and Denpasar (Bali) on Emirates are also part of the agreement. Garuda Indonesia has further codeshare agreements with 24 other carriers.
Another very important codeshare agreement was signed a few years ago with Singapore Airlines. Following the closure of borders due to Covid, on October 1st 2021 both Garuda Indonesia and SIA resumed, their codesharing on flights between Singapore and Bali, Jakarta and Surabaya as well as on flights from Singapore to London Heathrow and Mumbai. Prior to the covid crisis, both airlines also used to codeshare between Singapore and Balikpapan, Bandung, Lombok, Makassar, Manado, Medan, Semarang and Yogyakarta.
Back to profitability in 2023?
Meanwhile, Garuda Indonesia will continue to operate pilgrimage flights to Saudi Arabia, which could become its only intercontinental destination.
The airline currently only has around 30 planes, but intends to double its fleet by year end. In the longer term, Garuda Indonesia plans to have the same fleet size than in pre-pandemic times – roughly 120 planes. Garuda Indonesia will then acquire additional planes from leasing companies.
The new plan would then definitely water down the ambitions of Indonesia to have a global carrier as most overseas routes would only be served by codeshare partners or other international carriers. However, as State Enterprises Minister Erick Thohir projects to see the airline turning again a profit in 2023, the carrier has little choice than speeding up its business rehabilitation plan.