Garuda Indonesia

Tiger places big bet on Indonesia with re-launch of Mandala

Tiger Airways is banking the booming Indonesian market can support another new carrier and absorb over the next 14 months at least 10 A320s from the struggling airline group’s surplus fleet. Singapore-based Tiger has not yet invested a penny into Mandala Airlines but has a lot at stake as the Indonesian carrier plans to resume services in April following a 15-month hiatus, using Tiger’s aircraft and business model. While it only had to pay a token one dollar for its 33% stake in Mandala, Tiger along with Mandala’s other new investors will be providing a loan to cover re-launch costs and will need to continue pumping in capital until the airline becomes profitable, a potentially challenging proposition given current market conditions in Indonesia.

The new Tiger-backed Mandala will compete against three powerful LCCs in the Indonesian market – Lion Air, Indonesia AirAsia and Garuda Indonesia budget unit Citilink. These carriers combined now operate about 100 aircraft and are all expanding at high double-digit rates. Mandala will also have to compete against Garuda’s fast-expanding mainline operation and three second tier Indonesian carriers – Batavia Air, Sriwijaya Air and Merpati Nusantara Airlines – which also currently operate a combined fleet of about 100 aircraft and offer low fares, although they are not generally considered to be LCCs.

Garuda posts 3Q profit and strong growth figures fuelled by robust Indonesian economy

Garuda Indonesia has returned to the black after a challenging 1H2011 and has a bullish outlook, particularly in the fast-growing Indonesian domestic market. Garuda aims to tap into the expected 14% to 16% annual growth in Indonesia’s domestic market by pursuing rapid expansion at its budget unit Citilink, which it expects will be profitable starting in 4Q2011, and establishing a new regional jet operation from 2H2012.

Garuda is now preparing to spin off the Citilink unit into a separate company in early 2012, which will enable the LCC to pursue faster growth. Citilink recently began operating its first Airbus A320 and aims to be operating 20 of the type by the end of next year. Garuda is also planning to soon place an order for 18 large regional jets, which will be used primarily to improve connections at secondary bases.

New Airline Leader report examines the Asian aviation revolution

A report in the latest edition of Airline Leader, CAPA’s monthly strategy journal for CEOs, provides a comprehensive analysis of the fast-growing Asian aviation market. The report identifies three unique innovations originating from the region:

Asia's first time flyers the big winners as Paris Air Show PR juggernaut winds down

The major beneficiaries of this week’s frenetic (public relations) activity just outside Paris live half a world away. They are Asia’s emerging travellers – the millions that have never stepped inside an aircraft, but for whom air travel is becoming attainable. That opportunity took a major step forward as Asian carriers – many of whom the world had never heard of a decade or even five years ago – stepped up in front of the world’s media to order narrowbodies for the mass markets they see blossoming at home.