During yesterday's AviationTalk live session on Instagram, I spoke with Garuda Indonesia CEO Irfan Setiaputra on the future plans of Garuda.
You joined as the CEO just a month before COVID Pandemic in Jan 2020, you must have a really tough job...
I'm quite surprised that I'm still alive here. It is very, very challenging. I think it is also the toughest job in Indonesia these days here.
I thought about resigning several times. But I think the challenge is also very interesting. I'm a believer in an industry that will benefit the country and the nationals.
What's the latest update on Indonesia's opening to tourist? We've heard many changes on the opening plan so far...
Well, it keeps changing for sure. It's open now in Bali, it's basically no quarantine any more. You need to book 4 nights of accommodation though.
We are all excited. Everybody's excited to see people coming back into Indonesia and visiting this beautiful country. Please come, we are very happy to accept tourists here.
How are you going to restructure Garuda Indonesia? Can Garuda avoid bankruptcy?
We should be focused on profitability.
We are restructuring the debt and it's a challenging negotiation. It's a negotiation I am personally involved in. We've discussed our business plan with all the creditors, especially the lessors that Garuda will be focused on the domestic market and fly internationally to a few selected markets only.
We want to make sure that in the future we are becoming a profitable company and the first thing is to focus on the domestic market.
We made good profit from the domestic market in 2019, but we are losing it big time on international markets. One of it was flying to London.
If somebody asks about bankruptcy, don't worry about it. Don't worry everybody, including the president of the republican, Garuda will be alive because Garuda is part of this nation.
Garuda Indonesia CEO Irfan Setiaputra
The domestic market of Indonesia is unbelievable. In December 2020, the first year of the pandemic, our domestic market had already recovered 50%. And during the last three days, the government announced that there will be no testing before any domestic flight. Sales increased 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 with very low seat levels. Why? Because we are focusing on cargo. There's a huge amount of export from Indonesia. For example, we are flying cargo flights from Manado. We are bringing 25 tons of tuna fish. So even we don't have passengers. It's a profitable flight.
You mentioned less focus on international market. Will Garuda still fly to Europe?
We are going to maintain Amsterdam. We are looking at the possibility to increase the frequency of Amsterdam on direct flights using Boeing 777.
We will not return to London as it was unprofitable for Garuda.
We find the majority of the visitors to Indonesia are interested in going to Bali so our long-term strategy will be flying to Bali direct from anywhere in the world.
We do have to compete with foreign airlines such as Singapore Airlines. Indonesian loves to fly with them because they can bring Indonesians everywhere. We may be flying only to selected destinations but we are happy with this way.
We are very happy for any airlines that bring people to Indonesia. We are a national flag carrier. The ultimate goal of our presence is actually the economic development of Indonesia.
Garuda Indonesia CEO Irfan Setiaputra
If you are happy to come to Indonesia via Singapore or Dubai first, that's okay. I'm very happy to bring different value propositions to our passengers. Garuda Indonesia will provide direct non-stop flights to Bali in the future.
You keep mentioning Bali as a hub. What about Jakarta?
Well, Jakarta will still be maintained like today because Jakarta is for business more or less. Tourists like to bypass Jakarta and go to Bali direct.
What would be Garuda's fleet for the near future?
Earlier, we had discussions with our lessor and creditors, we mentioned that we have no plan to continue B777 because we don't see the ability for us to make profit due to the leasing being quite expensive and the limitation (numbers) of the flight that we have.
But now under the kind discussion with lessors, I think we are going to maintain the B777.
For international, we will continue to use Boeing 777 and Airbus A330s.
For domestic, we continue with the majority of the B737-800s. We plan to move Garuda's ATR-72 to Citilink.
Tell me more about the recent codeshare agreement you have with Emirates?
Our friends at Emirates are very good at connecting to the rest of the world because of their location in their Dubai hub.
Garuda Indonesia will bring passengers from other parts of Indonesia to Jakarta. Passengers can fly onward on codeshare flights with Emirates to their final destination. We will not fly directly to Dubai for the time being.
