Business

Garuda announces new plans
for Citilink ahead of spin-off

Flag carrier Garuda Indonesia has announced new business plans for its low-cost carrier (LCC) brand Citilink ahead of a plan to spin-off Citilink as a separate business entity in the first quarter of 2012.

The newly appointed advisor to Garuda’s board of directors for Citilink development, Con Korfiatis, told a press conference on Wednesday afternoon that the plans would include a “very thorough overall brand refresh” for Citilink, including a new livery design, new website, a new cabin interior design, new advertising and marketing strategies and new cabin crew uniforms.

“The whole process will take approximately four to six months to roll out,” Korfiatis said at the launch of Citilink’s new livery in Garuda City Center at Soekarno-Hatta International Airport in Cengkareng, Banten.

Garuda finance director Elisa Lumbantoruan said the spin-off process would make it easier for Citilink to expand its business, as the LCC could make decisions without consent from Garuda.

“This way, Citilink will become much more independent,” he said.

Elisa said the planned business expansion included the acquisition of five new Airbus A320 narrowbody airplanes to strengthen the Citilink fleet of five Boeing 737-300s and one 737-400.

“The five A320s will be acquired through leasings from Airbus with a security deposit of US$750,000 per month per plane,” he said, adding that the planes would arrive in Jakarta in several phases.

“The first airplane is expected to come either this month or in September, while each of the rest will follow next October, November, December, and February,” he said, adding that as the new Airbus A320 arrived, Citilink would phase out its Boeing 737 airplanes.

In the long run, Citilink also expects the arrival of 25 new Airbus A320s, recently ordered by Garuda from Airbus at the Paris Air Show in June, starting from 2014, he said.

All Citilink pilots would undergo retraining to qualify them to fly the Airbus airplanes, he said.

“The retraining will hopefully begin in the fourth quarter.”

Meanwhile, maintenance of the Airbus jetliners would be undertaken at the Garuda Maintenance Facility (GMF) Aero Asia at the airport area, just the same as other airplanes operated by Garuda and Citilink.

“A320 is nothing new to GMF as it has undertaken the maintenance service of numerous A320s operated by many other airlines,” Elisa said.

He said the LCC airline also planned to significantly expand its route growth in the upcoming years.

Citilink currently serves 10 domestic routes connecting Jakarta to Surabaya, Denpasar, Medan, Banjarmasin, Balikpapan and Batam. The LCC also serves the route linking Surabaya with Balikpapan, Banjarmasin and Makassar.

Citilink plans to serve destinations in the eastern part of Indonesia and regional routes by flying to Malaysia, the Philippines, Thailand, Singapore and Australia, Elisa said.

He said the LCC was forecast to carry 2 million passengers this year and aimed to reach 8.3 million passengers by 2013. (mim)

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