The Garuda Indonesia Group, the parent company of Citilink, stated that further down the line, the whole operation of Sriwijaya Air Group, including its financial matters, would also be under the administration of the cooperation agreement.

Garuda Indonesia president director Ari Askhara said that the joint cooperation could have a positive impact on both Citilink and the Sriwijaya Air Group, especially for expanding the airlines’ market segments and increase their capacity, in order for it to tighten its grip in the country’s airline industry.

“The cooperation will help the synergy between Garuda Indonesia Group and Sriwijaya Air Group to [boost] their passenger carrier market [share] in the airline industry to 51 percent,” Ari said in Jakarta on Wednesday.

Furthermore, Ari said the agreement would hopefully improve Sriwijaya Air Group.

“This cooperation will help Sriwijaya Air Group improve its operational and financial performance, as well as fulfill Sriwijaya Air’s commitment to third parties, among which are some in the Garuda Indonesia Group,” he said.

Meanwhile Sriwijaya Air president director Chandra Lie said the operational cooperation would help Sriwijaya Air Group recover in the increasingly competitive airline industry in Indonesia.

“We believe that Garuda Indonesia Group has the capability to manage the airline business well,” said Chandra Lie in an official statement.

The operational cooperation, which is to be managed by Citilink, would commence once the internal processes in each company are completed.

Although for the time being the cooperation would not change Sriwijaya Air Group’s share proportion, Garuda did not rule out the possibility that the KSO could be taken a step further by purchasing Sriwijaya’s shares.

Earlier this year, Sriwijaya Air Group and Garuda Indonesia Group signed a codeshare commercial cooperation agreement in a bid to strengthen their network cooperation in Indonesia. The codeshare cooperation was a first for both groups and served as the first step for them to conduct other strategic collaborations in the future.

Citilink recorded a 25.6 percent growth in passenger numbers in the first half of this year to 7 million from 5.6 million in the same period last year.

This year alone, Citilink expanded its business by opening new routes, both domestic, such as from Kertajati in West Java to Kualanamu in North Sumatra and Jakarta to Labuan Bajo in East Nusa Tenggara, and new international ones, such as Surabaya in East Java to Penang in Malaysia and Jakarta to three Chinese cities: Kunming, Xiamen and Nanjing. Citilink also operates charter flights to cities in China and Thailand.

Currently, Citilink manages 74 flight routes with a frequency of 274 flights each day. By the end of 2017, Citilink Indonesia operated 50 Airbus A320 jets — 45 CEO jets and five NEO jets — with a capacity of 180 passengers per aircraft.

Meanwhile, Sriwijaya Air Group has 48 Boeing jets with a total of 53 routes, including an international route from Medan in North Sumatra to Penang.

According to the International Air Transport Association (IATA), Indonesia is one of the fastest-growing air travel markets, ranking in the top five for the projected increase of yearly passenger numbers by 2036.

Some 355 million passengers are expected to fly in Indonesia that year, almost three times the 120 million carried in 2016.

That figure would make Indonesia the fifth-largest air travel market in the world, ranking behind China, the United States, India and Turkey.

The government has therefore been preparing for the significant increase in the number of domestic passengers carried by Indonesian airlines.

“We have to be ready for this jump in the number of passengers,” Transportation Minister Budi Karya Sumadi previously said. “That is why we are building more and more airports across Indonesia.”

Popular

Indonesian Muslim groups rally behind Iran amid escalating war

Details on gasoline, diesel rationing remain elusive

Witnesses, activists in Andrie case subject to threats