During yesterday’s AviationTalk live session on Instagram, I spoke with Garuda Indonesia CEO Irfan Setiaputra about Garuda’s future plans.
You joined as CEO just a month before the COVID pandemic in January 2020, you must have a really tough job…
I’m quite surprised to still be alive here. It’s very, very difficult. I think it’s also the hardest job in Indonesia these days here.
I thought several times about quitting. But I think the challenge is also very interesting. I believe in an industry that will benefit the country and nationals.
What is the latest update on Indonesia opening up to tourists? We’ve heard many changes to the opening plan so far…
Well, that keeps changing, that’s for sure. It is now open in Bali, there is no quarantine anymore. However, you must book 4 nights of accommodation.
We are all excited. Everyone is excited to see people coming back to Indonesia and visiting this beautiful country. Please come, we are very happy to accept tourists here.
How will you restructure Garuda Indonesia? Can Garuda avoid bankruptcy?
We should focus on profitability.
We are restructuring the debt and it is a difficult negotiation. This is a negotiation in which I am personally involved. We have discussed our business plan with all creditors, especially lessors, that Garuda will focus on the domestic market and fly internationally to a few select markets only.
We want to make sure that in the future we will become a profitable business and the first thing to do is to focus on the domestic market.
We made good profits in the domestic market in 2019, but we are losing it a lot in the international markets. One of them was flying to London.
If anyone asks about bankruptcy, don’t worry. Don’t worry everyone including the president of the republic, Garuda will be alive because Garuda is part of this nation.
Irfan Setiaputra, CEO of Garuda Indonesia
Indonesia’s domestic market is amazing. By December 2020, the first year of the pandemic, our domestic market had already recovered 50%. And for the past three days, the government has announced that there will be no testing before any domestic flight. Sales increased by 20% or more easily. So I’m very optimistic about the future.
On the international side, our flights now to Australia, Europe and Japan are starting to make a profit, even though the number of seats is very low. Why? Because we focus on freight. There are huge exports from Indonesia. For example, we operate cargo flights from Manado. We bring 25 tons of tuna. So even we don’t have passengers. It’s a profitable flight.
You mentioned less foucs on the international market. Will Garuda still fly to Europe?
We will maintain Amsterdam. We are studying the possibility of increasing the frequency of Amsterdam on direct flights by Boeing 777.
We will not return to London as it was not profitable for Garuda.
We find that the majority of visitors to Indonesia are interested in traveling to Bali, so our long-term strategy will be to travel to Bali directly from anywhere in the world.
We have to compete with foreign airlines such as Singapore Airlines. Indonesians love to fly with them because they can bring Indonesians everywhere. We may only fly to selected destinations, but we are satisfied that way.
We are very happy for all airlines bringing people to Indonesia. We are a national flag carrier. The ultimate goal of our presence is in fact the economic development of Indonesia.
Irfan Setiaputra, CEO of Garuda Indonesia
If you’re happy to come to Indonesia via Singapore or Dubai first, that’s okay. I am very happy to bring different value propositions to our passengers. Garuda Indonesia will offer direct non-stop flights to Bali in the future.
You keep mentioning Bali as a hub. And Jakarta?
Well, Jakarta will always be maintained as it is today because Jakarta is more or less for business. Tourists like to bypass Jakarta and go straight to Bali.
What would Garuda’s fleet be in the near future?
Earlier we had discussions with our lessor and our creditors, we mentioned that we do not intend to continue B777 because we do not see the possibility for us to make a profit due to the rental enough expensive and the limitation (numbers) of the flight we have.
But now, as part of the friendly discussion with the donors, I think we will maintain the B777.
Internationally, we will continue to use Boeing 777s and Airbus A330s.
For the domestic, we continue with the majority of B737-800s. We plan to move the ATR-72 from Garuda to Citilink.
Can you tell me more about the recent codeshare deal you made with Emirates?
Our friends at Emirates are very good at connecting to the rest of the world due to their location in their Dubai hub.
Garuda Indonesia will bring passengers from other parts of Indonesia to Jakarta. Passengers can continue their journey on codeshare flights with Emirates to their final destination. We will not be flying direct to Dubai at this time.