Garuda unveils cost-cutting drive

Garuda Indonesia, which posted losses of US$206 million in the first three quarters of 2014, has introduced the ‘Quick Wins’ initiative, in a bid to cut costs and drive revenue.


Garuda unveils cost-cutting drive


Garuda Indonesia, which posted losses of US$206 million in the first three quarters of 2014, has introduced the ‘Quick Wins’ initiative, in a bid to cut costs and drive revenue. The short-term strategy comprises three main components: network restructuring, fleet management and cost controls. Under the route rationalisation plan, Garuda will discontinue its service between Brisbane and Bali from 1 February 2015, as well as reducing the frequency of its JakartaTokyo Haneda service and postponing the launch of its new Jakarta-Nagoya route. In contrast, services to China are to be expanded with new charter flights to Chengdu, Chongqing, Ningbo, Kunming Changshui, Jinan, Harbin, Xi’an Xianyang, and Shenyang.

 

In terms of fleet management, Garuda said it will terminate the lease of “several aircraft”, as well as changing the configuration of its B737-800s. Garuda will still take delivery of 15 new aircraft in 2015, but says it will not increase its staffing levels to cater for this expansion. As a result, its staff-to-passenger ratio will be reduced, part of a broader plan to reduce operating costs by 10 per cent. The new aircraft this year will expand Garuda’s capacity by approximately 10-15 per cent, but still a slowdown compared to 2014 or 2013.