Garuda Indonesia (GA, Jakarta Soekarno-Hatta) has updated its business strategy with the recent unveiling of its “Quick Wins Programme.” Faced with a weakening Indonesian Rupiah and a tough local market, the Indonesian carrier says the plan will shore up its financial position by driving up revenue while cutting costs. Garuda posted an operating loss of USD250 million for the nine months to September 30, 2014.
Among the key areas the programme will focus on are fleet optimisation, network restructuring, and the reduction in cost overheads.
In a bid to reduce overcapacity, Garuda will either terminate aircraft leases early or sub-leasing aircraft out to other operators. In addition, the carrier plans to reduce its overall unit cost per seat by reducing the number of business class seats on its B737-800s from 12 to eight, while increasing those in economy class by between 15-20%.
In terms of its network restructuring plans, a number of unprofitable routes are to be closed including Jakarta Soekarno-Hatta to Tokyo Narita, and Denpasar to Brisbane International and Tokyo Haneda while frequencies to Australia and Europe are to be adjusted. In contrast, services to China are to be expanded with new charter flights to Chengdu Shuangliu, Chongqing, Ningbo, Kunming Changshui, Jinan, Harbin, Xi'an Xianyang, and Shenyang Taoxian International.
Garuda plans to cut its overheads by up to 10% by eliminating unnecessary expenditure which neither adds value nor raises its staff productivity. The carrier will reduce its staff-to-aircraft ratio from the current 60:1 to 50:1 by maintaining current staffing levels while increasing its fleet size by fifteen this year.
