21 October 2008

GarudaÃ¢â¬â¢s European comeback in doubt

JAKARTA - The CEO of Garuda Indonesia has hinted to Bisnis Indonesia that his airline's plans to rebuild its international route network may be postponed by the current worldwide economic upheaval.

Emirsyah Satar said a final decision on future route expansion would only be taken after the state-owned airline finishes evaluating the extent of the current economic crisis.

Bali Update (www.balidiscovery.com) said previously announced plans called for Garuda to open services to Madras, India this year followed by the resuscitation of their routes to Amsterdam in 2010.

Emirsyah confessed that the current economic crisis is having a major impact on the cost of leasing aircraft due to liquidity problems among financial institutions.

Garuda's currently flies to a number of foreign ports-of-call including Japan, South Korea, the Middle East, China, and Australia utilising Airbus 330, Boeing 747 and Boeing 737-800NG equipment.

And, while the worldwide economic downturn may dampen GarudaÃ¢â¬â¢s appetite for international expansion, Emirsyah says plans for developing the domestic market remain on track.

Garuda's CEO explained: "While the international market remains problematic, it's a proven fact that the domestic market continues to expand. Also, because Indonesia is an island nation the people will always require flight services."

Internationally, he believes the current international downturn will last for one to three years.

Garuda has already confirmed orders for ten Boeing 737-300ER aircraft at a value of US$2.3 billion, intending to use these planes for flights to Europe and the US.

Scheduled for delivery in 2010, Bali update noted it remains to be seen if liquidity problems from Garuda's leasing partners will stymie plans to bring these new aircraft on line.