Indonesia has always been an interesting if somewhat overlooked airline market. Fuelled by rapid economic and middle-class growth, 102 million Indonesians boarded a domestic flight in 2018, making that domestic market the fifth largest in the world at the time.
For such a large market, relatively few commercial airlines operate within it. And like all markets, the Indonesian domestic airline market is not without its quirks. COVID-19 hit Indonesia’s airlines for six, but as long time Indonesia watchers will tell you, COVID-19 was just the latest in a rolling series of dramas impacting Indonesia’s domestic airline industry.
As signs of life emerge within that industry, IBS Software recently commissioned Brendan Sobie of Sobie Aviation to write a white paper on Indonesia’s airline industry. The white paper provides a handy snapshot of what’s going on within Indonesia’s domestic airline industry and where the various airlines are heading.
Garuda’s woes continue
Garuda is Indonesia’s best-known airline and arguably its most trouble-plagued. The airline is undergoing a high-drama restructuring, and its future is not assured. In its heyday, Garuda was Indonesia’s biggest airline but was overtaken by the Lion Air Group some time ago.
Garuda’s market is likely to shrink further soon. In 2019, Garuda commanded a 20% domestic market share. But the airline is in downsize mode. Garuda wants to trim its fleet by about 50% to some 70 planes as part of the restricting process.
The surviving fleet of Boeing 737-800s and Airbus A330s would service Garuda’s anticipated 10% domestic market share post-COVID-19 – if the airline survives at all.
Garuda Group pins its hopes on Citilink
If Garuda does manage to work its way through the restructuring process, the role of its low-cost subsidiary will grow. Unlike its parent company, Citilink plans to hold onto…