Garuda’s Low-Cost Carrier to Fly Internationally in 2012

State-owned PT Garuda Indonesia, the nation’s largest airline, said its low-cost carrier will start flying international routes from next year.

Citilink plans to fly to Singapore and destinations in Malaysia, the Philippines and Australia, Garuda Chief Financial Officer Elisa Lumbantoruan said at a press briefing in Jakarta today. The unit will be spun off into a fully owned company called PT Citilink Indonesia in 2012 to help differentiate it from Garuda’s full-service operations, President Director Emirsyah Satar said in an interview today.

“We will strengthen domestic routes, and are looking to expand to regional destinations,” he said.

Citilink, which currently operates five Boeing Co. 737s, has 55 Airbus SAS A320 planes and two more 737s on order, Con Korfiatis, an adviser to the Citilink board of directors, said today. It is due to receive the first of the Airbuses next month, he said. The low-cost carrier boosted passenger numbers by 60 percent to 731,000 in the first half from a year earlier and said it expects to fly 2 million passengers this year.

The government is processing a license for Citilink, which is expected to account for 30 percent of Garuda’s net revenue in 2015, Lumbantoruan said. Citilink had revenue of $48.1 million in 2010, or 2.2 percent of Garuda’s $2.15 billion revenue, according to the airline’s annual report.

-- Editors: Andrew Janes, Greg Ahlstrand

To contact the reporter on this story: Femi Adi in Jakarta at fadi1@bloomberg.net

To contact the editor responsible for this story: Berni Moestafa at bmoestafa@bloomberg.net

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