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Garuda Indonesia And The Boeing 777-300ER.  
User currently offlineSexyAdonis From United States of America, joined Mar 2010, 116 posts, RR: 0
Posted (3 years 2 months 2 weeks 6 days 5 hours ago) and read 11696 times:

I was wondering if any of our fellow A-netters would be able to give us an update regarding the entry into service of the Boeing 777-300ER with Garuda Indonesia. From my understanding they are schedule to join the fleet this year.

I assume that with the Boeing 777-300ER, the airline will be able to make the Jakarta – Amsterdam flight nonstop (currently served with an A330 via Dubai) and will also look at possibly expanding to other European destinations which it has previously served (London, Paris, etc.). The airline is also set to join Skyteam in 2012, thus probably making Paris a high priority in order to link up with the rest of the Air France-KLM network.

Any ideas if the United States would be in radar? Jakarta – Los Angeles would perhaps be an option.

In spite of the great competition (and hub proximity) to Singapore Airlines and Malaysia Airlines does anyone foresees Garuda becoming a player in the Kangaroo route?

As always your thoughts and comments are greatly appreciate.

Thank you!

Sexy Adonis

12 replies: All unread, jump to last
 
User currently offlineHB-IWC From Greece, joined Sep 2000, 4480 posts, RR: 72
Reply 1, posted (3 years 2 months 2 weeks 5 days 20 hours ago) and read 11141 times:

The delivery of the first B77W is expected for early 2012. Current plans call for the deployment of the aircraft on a nonstop CGK AMS route in a 3-class layout. GA will be reintroducing First Class. The freed up A332 capacity should be used to reopen additional European gateways via DXB.

GA has no current plans for a return to LAX. However, a cooperation with DL via NRT is under discussion and may lead to a rescheduling of the current CGK NRT flight to fit into the DL NRT hub or to DL operating NRT CGK NRT.


User currently offlinekretek From United Kingdom, joined Nov 2006, 94 posts, RR: 0
Reply 2, posted (3 years 2 months 2 weeks 5 days 19 hours ago) and read 11098 times:

The Kangaroo route is already well served by many airlines, such as QF, BA, EK, SQ, MH and now Etihad entering the Australian market. The Kangaroo route mainly caters for the strong Australian and British family cultural links. There is no strong cultural link with Indonesia and Britain, so going after this market is rather pointless in an otherwise highly competitive route. The economic powerhouse has well and truly shifted to East Asia (along with India) and intra-Asian trade is booming. Much of Australia's economy, primarily mining in Western Australia, is dependent on Asia, not mother England. I think a lot of the people in the Western world have not woken up to the new economic dynamism in this part of the world and narrowly focus on east-west travel/trade routes, rather than north-south travel/trade routes. It would make better sense for Garuda to develop routes linking Indonesia with other East Asian nations and there is talk of opening a route with New Delhi. Perhaps we should think outside the square and look at the possibility of Indonesia being an alternative stopover for Australians wanting to travel to China, Japan, Korea or other South East Asian nations?
As for Garuda going to the States? No chance in the short-medium term. It will be better if they develop codeshare routes with Delta via Japan. The flight to Amsterdam is not doing great financially, so it's better to sort this out first before expanding to other European destinations.


User currently offlineSexyAdonis From United States of America, joined Mar 2010, 116 posts, RR: 0
Reply 3, posted (3 years 2 months 2 weeks 5 days 13 hours ago) and read 10787 times:

Quoting kretek (Reply 2):
The freed up A332 capacity should be used to reopen additional European gateways via DXB.

Thank you for the information HB-IWC.

I would imagine that when you referred to the allocation of “freed up A332 capacity” being used to open flights to other European destinations via DXB would be an “interim” solution as more Boeing 777-300ER are delivered. After all, they have ordered 10 of them!

I am also glad to hear that they will not be leaping into serving LAX with their own metal as they are better off channelling passengers via Tokyo – Narita with DL.

With regards to the Jakarta – Amsterdam route, the advantage that Garuda will eventually have over KLM are:

(1) The offering of a much more Premium oriented product (with the introduction of First Class and an upgraded Business Class product) on the route.

(2) A non-stop service (KL stops in KUL).

Regarding the Australian market, due to the geographical position of Indonesia – where Jakarta is only 3 hours and 30 minutes from Perth, a short hop across from Darwin and also equally accessible from Brisbane, Melbourne and Sydney – Garuda would be able to focus on tapping into the Western Australia, Northern Territory markets and funnelling passengers through its Jakarta hub with seamless connections on to the rest of Asia.

But what strategy could be used for Queensland, NSW and Victoria? After all, these three states already have an interesting selection of airlines linking these state's respective main international gateways to and from Asia. What role can Garuda play in Australia that would be inline with the fleet/route and product upgrade expansion being planned in Jakarta? A focus on India perhaps?

Sexy Adonis


User currently offlineHB-IWC From Greece, joined Sep 2000, 4480 posts, RR: 72
Reply 4, posted (3 years 2 months 2 weeks 4 days 19 hours ago) and read 9190 times:

The B77Ws will also be used to replace the B744s, which will eventually be phased out. In regard to the competition to Europe, I believe that at least one of the airlines currently service CGK from Europe (KL, LH, TK) will eventually launch nonstop flights as well. It remains to be seen which one will be first.

User currently offlinemandala499 From Indonesia, joined Aug 2001, 6590 posts, RR: 75
Reply 5, posted (3 years 2 months 2 weeks 4 days 18 hours ago) and read 9082 times:

Quoting SexyAdonis (Reply 3):
Regarding the Australian market, due to the geographical position of Indonesia – where Jakarta is only 3 hours and 30 minutes from Perth, a short hop across from Darwin and also equally accessible from Brisbane, Melbourne and Sydney – Garuda would be able to focus on tapping into the Western Australia, Northern Territory markets and funnelling passengers through its Jakarta hub with seamless connections on to the rest of Asia.

I thought GA pulled out of CGK-PER?

Jakarta in itself is not ideal for an expansion for a hub... it lacks the parking space it needs because everyone is based there and are expanding...

Mandala499



When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineGARUDAROD From United States of America, joined Apr 2000, 1503 posts, RR: 1
Reply 6, posted (3 years 2 months 2 weeks 4 days 16 hours ago) and read 8894 times:

I have it on very good authority from multiple sources within Garuda, including a Top Management official,
that LAX is/was planned to join the network when the 5th B777 is received.
This was supposed to be 2Q/2012 but has now been pushed back to 2013.

What I would like to know though, the GA B777's were due to be delivered starting in 2011
but were pushed back a year. What happened here? What was the cause of the delay?
Also, I know that the recent IPO was very much over subscribed, meaning GA forecast much more revenue to be
generated than they actually received. Will this "loss" of revenue impact the future expansion?

I also heard that there are to be a total of 3 "retro" planes painted up.
One is the new B737-800 in the Convair 990 colours.
What are the other two type of planes and what liveries will be used?



Cargo doesn't whine, moan, or complain
User currently offlineHB-IWC From Greece, joined Sep 2000, 4480 posts, RR: 72
Reply 7, posted (3 years 2 months 2 weeks 4 days 13 hours ago) and read 8723 times:

Quoting GARUDAROD (Reply 6):
I have it on very good authority from multiple sources within Garuda, including a Top Management official,
that LAX is/was planned to join the network when the 5th B777 is received.

LAX may have been often talked about, but there are absolutely no plans whatsoever at this point to return there. Right now even the additional Europe services are very much in jeopardy. A return to LAX will happen under a code share agreement with DL and/or KE as part of the Skyteam process, but not with GA metal.


User currently offlineSexyAdonis From United States of America, joined Mar 2010, 116 posts, RR: 0
Reply 8, posted (3 years 2 months 2 weeks 4 days 12 hours ago) and read 8668 times:

Quoting mandala499 (Reply 5):
I thought GA pulled out of CGK-PER?

Currently the airline is only serving Sydney, Melbourne and Perth.

The only airline operating nonstop service between Perth and Jakarta is Jetstar and QANTAS also codeshares on these flights.

Perth is big with services into and out of Denpasar. On some days you can have up to three Garuda Indonesia Boeing 737-800 flights. However, if it were to make the “numbers” Jakarta – Perth – Jakarta could easily be re-introduced and be run effectively.

Quoting GARUDAROD (Reply 6):
I have it on very good authority from multiple sources within Garuda, including a Top Management official,
that LAX is/was planned to join the network when the 5th B777 is received.
This was supposed to be 2Q/2012 but has now been pushed back to 2013.

Interesting, as I had heard similar rumours as well.

Well, in that case, what could very well be is that, as HB-IWC points out, Los Angeles will initially be operated in a codeshare with Delta Airline via Tokyo-Narita. This will allow Garuda to start recapturing some of that market (long lost to Singapore Airlines). Garuda will join Sky Team in 2012 (it will be a busy period for Management) and have opted to delay the start of the LAX service until 2013.

Sexy Adonis


User currently offlineLAXintl From United States of America, joined May 2000, 24312 posts, RR: 47
Reply 9, posted (3 years 2 months 2 weeks 4 days 12 hours ago) and read 8659 times:

I tend to agree, LAX should remain off the GA network map for sometime. Other than a political route, I don't see the economics working. Look at even Malaysian which has trouble supporting North America flights. The USA can be nicely served if complimentary schedules are developed that link with Skyteam partners DL and KE.


Quoting GARUDAROD (Reply 6):
Also, I know that the recent IPO was very much over subscribed, meaning GA forecast much more revenue to be generated than they actually received

The proposed IPO valuation fell flat on its feet to be frank, with market only indicating about 50% valuation of what the airline hoped for. Imo this was a blunder of the Indonesian Govt placing too high unrealistic P/E value and PBV ratio on the carrier up front. (probably too make up for blunders they made undervaluing other state companies they have sold.)

Lets see what the finals numbers are when trading actually commences. But hey you can buy a share for mere $0.08.



From the desert to the sea, to all of Southern California
User currently offlineSLCUT2777 From United States of America, joined Dec 2005, 3993 posts, RR: 11
Reply 10, posted (3 years 2 months 2 weeks 4 days 6 hours ago) and read 8383 times:

Quoting LAXintl (Reply 9):
I tend to agree, LAX should remain off the GA network map for sometime. Other than a political route, I don't see the economics working. Look at even Malaysian which has trouble supporting North America flights. The USA can be nicely served if complimentary schedules are developed that link with Skyteam partners DL and KE.

At least for the time being, since the 773ER lacks the range needed to fly CGK-LAX. I think Indonesia-direct North America service should be on the long range radar (5-10 years) for any carrier however. The more likely scenario is DL will eventually try LAX-CGK by mid decade with a 772LR, but via NRT or ICN with a GA code share seams to be the most viable immediate solution. Eventually SIN and BKK are going to get competition from SGN (new airport coming) and CGK (modern facility built during the 1980s) for North American flights (LAX, SFO, YVR).



DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
User currently offlinemandala499 From Indonesia, joined Aug 2001, 6590 posts, RR: 75
Reply 11, posted (3 years 2 months 2 weeks 4 days 4 hours ago) and read 8298 times:

Quoting SexyAdonis (Reply 8):
The only airline operating nonstop service between Perth and Jakarta is Jetstar and QANTAS also codeshares on these flights.

I just rechecked... GA still does CGK-PER... but the numbers are 65-85 pax per flight only I am told.

Quoting GARUDAROD (Reply 6):
I have it on very good authority from multiple sources within Garuda, including a Top Management official,
that LAX is/was planned to join the network when the 5th B777 is received.
This was supposed to be 2Q/2012 but has now been pushed back to 2013.

One top management official seems to have conceded privately that the 777 may not happen at all!

Quoting LAXintl (Reply 9):
The proposed IPO valuation fell flat on its feet to be frank, with market only indicating about 50% valuation of what the airline hoped for. Imo this was a blunder of the Indonesian Govt placing too high unrealistic P/E value and PBV ratio on the carrier up front. (probably too make up for blunders they made undervaluing other state companies they have sold.)

Indeed it is so far! The numbers look realistic but what's causing investor reluctance isn't the numbers. The PE is not bad for an airline... but investors actually saying, "we want double the PE!" The reason why the reluctance by the big funds is is that amongst them there seems to be consensus that Garuda seems to be polishing rusted metal to make it look good and hide the real good stuff... there's a bit of a trust gap between the numbers (which they believe) and the non-numbers (which they don't believe what GA is saying).

There are other concerns on the expansion that GA is planning after the IPO.

Mandala499



When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlineLAXintl From United States of America, joined May 2000, 24312 posts, RR: 47
Reply 12, posted (3 years 2 months 2 weeks 3 days 15 hours ago) and read 7744 times:

Quoting mandala499 (Reply 11):
The PE is not bad for an airline... but investors actually saying, "we want double the PE!"

I'm not sure what you are saying.

The initial government valuation proposal would have been for a P/E ratio of almost 30. In comparison regional peers like SQ, CX, and even LCCs only have P/E's in the range on 8-16. The proposed initial Garuda P/E was far out of whack in comparison to the performance of its regional peers and cause for concern in the investor community.



From the desert to the sea, to all of Southern California
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