With the codesharing cooperation, both airlines expect to join forces by combining their market share and the routes they serve.

Garuda Indonesia currently flies to 90 domestic and overseas destinations, while Sriwijaya Air has 64 routes. The combined flight services of both airline groups, including Garuda’s low-cost subsidiary Citilink and Sriwijaya’s subsidiary NAM Air, will make up around 52 percent of the market share.

The codesharing agreement will include routes that until now have only been flown by either Garuda Indonesia or Sriwijaya Air, as well as those flown by both airlines.

“Partnership is one of the ways we can develop our network. One airline alone cannot develop routes to all destinations,” Garuda Indonesia president director Pahala N. Mansury said on Wednesday.

He added that the problem was exacerbated by the limited fleet size, as Garuda Indonesia Group currently had a fleet of 202, of which 144 aircraft were operated by Garuda and the remainder by Citilink.

The limited fleets of individual airlines will not be sufficient for the increasing demand for air travel in the archipelagic country, the airline notes.

Transportation Ministry data show that 109.3 million passengers were flown by domestic airlines last year, a 9.6 percent increase from 2016.

Of the figure, 96.8 million were domestic passengers, an 8.4 percent increase from 2016, while international passengers increased by 20.4 percent to 12.49 million, from the previous year.

“We want to examine the possibility of building a complementary network,” Pahala added.

As an example, he mentioned the route connecting Jakarta with Sampit, Central Kalimantan. Garuda Indonesia might fly from Jakarta to Semarang, Central Java, this route would be combined with the Sriwijaya Air route that connects Semarang with Sampit.

From the customer’s perspective, the ticket is a simple Jakarta-Sampit route without having to book separately through the two airlines.

However, for the first phase, not all routes will be combined straight away, with around 10 to 20 routes expected to be included in the cooperation.

Garuda also maintained that such a mechanism would also be more commercially competitive, and would improve profitability as well as the seat load factor (SLF) of its routes.

While it has added five new routes this year such as from Jakarta to Sorong, Papua in March, Garuda has also closed several routes with negative results such as that from Medan, North Sumatra to Singapore.

So far, as of the first quarter, Garuda Indonesia SLF has dropped 1.1 percentage point to 71.4 percent compared to the same period last year.

Garuda Indonesia has also continued posting losses, with a US$64.3 million loss in the first quarter, a roughly 36.5 percent decrease from the loss in the first quarter last year of $101.2 million.

Meanwhile, Sriwijaya Air commercial director Toto Nursantyo said the airline expected the cooperation would materialize within two months. The agreement was also expected to have an impact on the tourist industry. “Tourism is a key point that we include because it is a [sector] with robust growth,” he said.

He added that with codesharing, it would be possible to connect London to scenic destinations such as Labuan Bajo or Waingapu in East Nusa Tenggara.

The single price ticket could help to attract foreign tourists.

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