Airline News
Garuda opens world’s ‘largest’ MRO hangar
October 2nd 2015
Garuda Indonesia on Monday opened "the world’s largest" maintenance facility at its Jakarta Soekarno-Hatta base to support the state-owned carrier’s growing fleet as well as regional carriers tapping into Indonesia's growing aviation market. Read More »
The maintenance facility is the fourth for group subsidiary, Garuda Maintenance Facility (GMF), AeroAsia. With an area of about 67,000m², the new hangar will nearly double GMF's capacity. The facility can service 16 narrow-bodies simultaneously, but due to limited personnel and technical capabilities, it can only handle 12 aircraft until it reaches full capacity in 2018. GMF plans to carry out 209 maintenance projects next year, which would increase to 313 by 2018, GMF chief, Richard Budihadianto, explained. GMF also planned to construct an MRO facility in Bintan Island, close to Singapore, in the near future where GMF hoped “at least 40%-45% of future revenue” would come from (foreign) third-party carriers, up from the 30%.
"The presence of the fourth hangar will strengthen Indonesia's position as one of the aviation industry’s significant players in [maintenance, repair and overhaul]," State-Owned Enterprises Minister, Rini Soemarno, commented. "In the next 20 years, the world's centre of aircraft maintenance will shift to the Asia-Pacific along with air traffic," she said. The facility's main purpose is to serve Garuda's growing fleet. The flag carrier plans to add 21 aircraft this year, to reach 190, and is set to expand to 241 jets by 2020. At the Paris Air Show in June, it signed Letters of Intent to purchase 30 B737MAXs and 30 B787-9s from Boeing and 30 A350-900s from Airbus, worth nearly $20 billion at list prices.
However, controversy still bubbles away over whether Garuda will honour these commitments. In August, Indonesia’s new maritime affairs minister, Rizal Ramli, made the news when he requested that Garuda cancel the A350 order 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.
"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 A350s, which would be funded by a $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 by local news agency kompas.com. He said Garuda's routes to Europe had a load factor of 30% only. 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 A350s and we will summon the [Garuda] management to change its plans," Rizal said.
Garuda’s commercial director, Handayani, last week said the carrier saw demand for flights increase during the first eight months of the year, despite the fluctuating rupiah and sluggish economy. As of June, Handayani said, her airline carried more than 13 million passengers, representing growth of 19.1% year-on-year, and expects this to increase to 25 million by year-end, up from last year’s 21.5 million. Handayani also noted that Garuda’s market share in Indonesia, which included low-cost arm Citilink, had expanded to 44% from last year’s 38%.
