Garuda Indonesia Delays London Launch to May 2014

Future SkyTeam alliance member Garuda Indonesia has confirmed it has delayed the planned introduction of non-stop flights between Jakarta and London until May 2014, confirming the exclusive story from our schedule blog, Airline Route last month. Airline Route reported on July 26, 2013 that the Asian carrier had closed reservations for the five times weekly service which had been due to launch on November 2, 2013.

The delay has been caused by limited runway capacity at Jakarta’s Soekarno-Hatta International Airport, according to Garuda with the pavement classification number (PCN) of the runways and apron at Soekarno-Hatta Airport not meeting the required level of strength that is typically needed for the operation of a full capacity, heavy duty commercial airliner such as the new Boeing 777-300ERs that Garuda plans to utilise on the London route.

To operate at full capacity serving direct, non-stop flights between Jakarta and London, while carrying 314 passengers and a maximum take-off weight of 30 tons of cargo, the Boeing 777-300ER requires a PCN of 132 tons, according to Garuda operational calculations but Soekarno-Hatta’s runway has a PCN of just 120 tons.

“In order for Garuda Indonesia to still make the flight to London, there would have to be a restricted take-off weight of 329,365 kg, which would mean a reduction in the number of passengers by 39 people and a loss of the ability to carry cargo,” said Emirsyah Satar, President and Chief Executive Officer, Garuda Indonesia.

“Garuda Indonesia would also be unable to fly directly to London. Consequently, the implementation of this flight, with these conditions, in this competitive world of air travel, would have a serious effect on the operational and business requirements of this route,” he added.

The planned resumption of flights to London was a major part of the airline's Quantum Leap 2011-2015 programme to develop its international network and become a ‘global player’ and support its entry into the SkyTeam alliance, planned for March 2014. It follows its successful reintroduction of flights to Amsterdam in June 2010, albeit with a technical stop in the United Arab Emirates (this was previously Dubai but a new marketing partnership with Etihad Airways has seen the flight switched to Abu Dhabi to enhance synergies with its partner carrier).

Indonesia is an increasingly important market for the UK. Bilateral trade is growing and the UK Prime Minister David Cameron last year signed a partnership commitment to double trade (goods & services) by 2015 to £4.4 billion.

According to forecasts Indonesia is projected to be the world’s 5th largest economy by 2030 and the UK sees great potential in Indonesia and is keen to build on existing trade and investment, according to UK Trade and Industry (UKTI) literature. The UK is ranked 20th largest exporter to Indonesia and the 3rd largest among EU member states and in 2011 exports of goods and services to Indonesia were worth £0.97 billion, an increase of 28 per cent, while total trade 2011 was £2.4 billion (up 10 per cent year-on-year). The UK’s largest exports to Indonesia include power generation equipment; general industrial machinery, road vehicles, pulp & waste paper and specialised machinery.

UK companies are interested in new infrastructure opportunities in Indonesia, according to UKTI, and the lack of direct air services up until now have now deterred travellers between the two countries. The UK is now one of the largest markets to Indonesia, the largest economy in South East Asia with 160,000 people currently travelling to the region on business and leisure, despite not having a direct air service.

Garuda Indonesia first started serving the UK market in the mid-1980s as the terminus point on existing services to other points in Europe. A dedicated London operation was introduced from Jakarta in October 1992, via Abu Dhabi while a Bangkok stop was added to the itinerary in subsequent years and flights were also offered from Denpasar.

In October 1997 the London operation was suspended for a two year period but resumed from November 1999 on the Denpasar – Bangkok – London routing and latterly via Singapore. The airline departed the UK market in May 2003, leaving Amsterdam as its only European destination, a route which was eventually closed in October 2004.

During its former operation to the UK, Garuda Indonesia utilised Gatwick Airport as its London gateway and it is no real surprise it has selected the airport for its return to this market given the current capacity constraints and limited slot availability at London Heathrow Airport. However, there are strong transfer flows via London Heathrow and with British Airways reported to be interested in introducing its own flights to Jakarta, possibly via Singapore, Garuda may aim to take advantage of the six month delay to work with its future SkyTeam partners to gain access to Heathrow, a long-term ambition for the carrier.

The Jakarta – London direct flight is also expected to open up enhanced access from South East Asia to Europe and vice versa and will bring more competition on the Kangaroo route between Australasia and Europe. Garuda Indonesia has also expanded its flight network to Europe through codeshare agreements with other international airlines, including Etihad Airways, which enables passengers to fly into seven major cities across Europe and it still has plans to add further markets across the continent on its own branded services.

The airline is expected to expand its 777-300ER fleet to four aircraft by the end of this year and although these aircraft will now be used on flights within Asia and to Australasia - including routes to Denpasar, Singapore - they are planned for European operation. Alongside London, Garuda plans to serve Paris and link into the SkyTeam hub at Charles de Gaulle Airport, while flights to Germany and Italy are also under consideration.

In the table below we highlight O&D demand between Jakarta and London over the past five years. As the analysis shows, bi-directional O&D demand grew at double-digit rates during 2009, 2010 and 2011 and just below, at 9.6 per cent last year. A major reason of this growth has been the increased connectivity between the two cities via other global hubs. Emirates Airline is the largest operator on the route accounting for around 32.1 per cent of these passengers in 2012 via Dubai International Airport.

Other notable traffic flows are recorded for Singapore Airlines via Singapore Changi (29.6 per cent) and Etihad Airways via Abu Dhabi (12.3 per cent). According to the analysis, London Heathrow is the main O&D gateway for passengers travelling to or from Jakarta accounting for around 93.8 per cent of all traffic between the two cities.