Airline News
Government to force Garuda to cancel A350 order?
August 17th 2015
Indonesia’s new maritime affairs minister, Rizal Ramli, made the headlines last week when he requested that flag carrier, Garuda Indonesia, cancel its 30-on-order A350s and cited poor loads on Garuda’s existing long-haul routes, as well as the poor long-haul performance of its regional peers, as his reasons. Read More »
"I made the request to President Jokowi (Joko Widodo) last week. I don't want Garuda to go bankrupt again. Last month the airline agreed to buy 30 Airbus A350s, which would be funded by a US$44.5 billion loan from the China Aviation Bank. The aircraft is only suitable for Jakarta-America and Jakarta-Europe routes," Rizal was quoted as saying last week by local news agency kompas.com.
He said Garuda's routes to Europe had a load factor of 30%. Instead of expanding its international routes, it would be better if Garuda bought additional A320s and focused on domestic and regional markets, he suggested.
"We can rule the regional market in five to seven years. When we are strong enough, we can go onto the next step. The president has agreed to the cancellation of the purchase of the Airbus A350s and we will summon the [Garuda] management to change its plans," Rizal said.
Separately, Garuda Indonesia vice-president for corporate communications, Ikhsan Rosan, said the carrier had not made a final decision on the purchase of the A350. "It is true there was a signing [ceremony] in Paris [with Airbus in June], but it was just a Letter of Intent," said Ikhsan.
It is unclear if Garuda’s order for 30 B787-9s, also placed at Le Bourget in June, is being re-examined.
