Airline News
Garuda to cancel either Airbus or Boeing widebody order
November 20th 2015
Garuda Indonesia will decide whether to action the letters of intent (LOI) for 30 new long-haul aircraft with either Airbus or rival Boeing by end-2015, the flag carrier’s chief said in an interview on the sidelines of the AAPA annual meeting in Bali last week. Read More »
In June, Garuda signed LOIs for 30 A350s from Airbus and 30 787s from Boeing at the Paris Airshow, each worth approximately $9 billion. "We are still comparing the two aircraft, but we will go with only one type," Garuda chief, Arif Wibowo, told Reuters. Once selected, the winning type will then be used to replace Garuda's fleet of ten A330-200s and thirteen A330-300s. The airline also operates nine B777-300ERs, with the tenth and last to join in 2016.
The new order comes as the airline tapers growth plans to further cut costs and boost its bottom line amid overcapacity in Southeast Asia. Garuda faces intense competition in its domestic market, and restrictions at airports within the country not yet upgraded or fully equipped to handle increased traffic.
Garuda has reported a net profit of $51.4 million for the nine months ended September 30, sharply reversing losses in the year-ago period, helped by lower fuel prices and cost reductions, from $3.08 billion to $2.72 billion, due to its Quick Wins program.
Garuda hopes to delay delivery of at least some of the six A330s due for delivery in 2017. It is also talking to Airbus about converting some A330 orders to the upgraded A330neo - due to enter service later this decade and promising better fuel efficiency and lower operating costs. Garuda also said it hoped to defer the delivery of six out of nine-on-order ATR72-600s.
Meanwhile, Garuda will launch Denpasar-Beijing and Denpasar-Guangzhou services from January, while adding capacity to the Middle East. In terms of long-haul network growth, the carrier has again shelved plans to launch services to Frankfurt and Paris. As such, Amsterdam and London remain its sole destinations in Europe. From March, Garuda will switch from Gatwick Airport to Heathrow, although the inbound sector will stop in Singapore on the way to the UK as runway restrictions at Jakarta’s Soekarno-Hatta still prohibit Garuda’s B777s to make the journey non-stop. The evening slots Garuda acquired at Heathrow, following years of applications, are less than ideal as they require a morning departure from Jakarta, preventing same day connections from Australasia and most of Southeast Asia.
