Garuda Indonesia Is Considering Discontinuing First Class

Last year I had the chance to fly Garuda Indonesia first class from London to Jakarta and back, and had an incredible experience. As far as I’m concerned, Garuda Indonesia has the friendliest staff of any airline, both on the ground and in the air. The level of customization and attentiveness that they offer first class passengers is only rivaled by Air France, in my opinion.

For a while Garuda Indonesia had plans to launch a new flight between Jakarta and Los Angeles (via Tokyo). They formally requested permission to operate the route in February, and as of this point haven’t yet withdrawn the request with US authorities, but also haven’t announced when the service will start. Of course it would have been awesome to see Garuda Indonesia flying to the US, even if the route was a (near) guaranteed money loser.

Well, unfortunately it looks like we may not see Garuda Indonesia first class being offered to the US anytime soon. Beyond that, we may not see Garuda Indonesia first class around much longer at all. Nikkei Asian Review has the story of how Garuda Indonesia has a new CEO who has a background in banking, and his plans for the airline involve service cuts and less expansion.

One of Garuda Indonesia’s biggest problems might be that they can’t seem to decide on a strategy, and that it changes every couple of years based on who is in charge:

Such a pivot, from expansion and a focus on luxury offerings to cutbacks, has become all too familiar at the flag carrier. Garuda has flipped between these strategies numerous times in the past decade alone. When the airline made its debut on the Indonesia Stock Exchange in 2011, then-President Emirsyah Satar brought restructuring to an end and began expanding the Garuda network. Then the surging price of crude oil sent the carrier deep into the red in 2014, and routes were cut back again. But its expansion resumed two years later under then-President Arif Wibowo, when Garuda introduced direct service from London and announced it would restore routes to North America.

That can’t be good in terms of developing a long term business plan. For what it’s worth, the airline made $78 million in 2015, $9.4 million in 2016, and so far in the first half of 2017 has lost $214.5(!!!).

The airline plans to try and address their labor costs, though is also considering cutbacks to their inflight product, including the possibility of discontinuing their first class. They realize they’re not getting much of a return on their investment in a superior inflight product:

Maintaining first class involves high costs, and few customers are willing to shell out for such an expense, said Nina Sulistyowati, the airline’s director of marketing and information technology. While Garuda plans to keep first class on routes between Indonesia and Europe for the time being, the company is also considering a plan to eliminate the top-end seats entirely and use the space they occupy for more profitable business-class seats instead.

Garuda will also take a knife to in-flight meals. While visitors to the travel fair were greeted with the full spread of offerings, travelers on certain routes could get fewer items in their meals, or smaller portions. Business-class passengers on some international routes have had their beverage options cut. On domestic routes, meals will feature different ingredients, and travelers will have fewer newspapers and magazines to choose from. Garuda will also review its suppliers, and has closed some reservation offices in shopping malls and elsewhere to further reduce costs.

Unfortunately this doesn’t come as much of a surprise. I’d sure be sad to see Garuda Indonesia cut their first class product, even if it’s the right decision for them financially. I also think it’s fairly safe to assume that their LAX route won’t be launching anytime soon.

What do you make of Garuda Indonesia’s new strategy?

(Tip of the hat to W)

Comments

  1. Is there a reasonable way to redeem miles for this product before it disappears into the abyss? Like you, just wanna get this checked off the bucket list.

  2. Nina Sulistyowati, the airline’s director of marketing and information technology. The same person is the director of marketing AND information technology?! Is Garuda a five person start-up company?

  3. This is a bummer, I flew in their First Cabin last December for a dive trip from LHR-CGK and would be sad if they discontinued it as it was amazing.

  4. I flew London Heathrow in F a couple of weeks ago and the agent taking care of me on arrival at CGK said they cut F on the Amsterdam flight within a couple of weeks. It will for now operate on the London route.

    Thats too bad, as their Amsterdam route has by far the best F experience of the two, since they use Schippol VIP center. Tansitng AMS is so easy and comfortable with them.

    Garuda only has two F class planes, operating on some flights to Europe and Japan. I thought they had this service to get and uphold their Skytrax level 5. Isnt it a must with F class for that level? They are one of only 9 airlines in the world with that top level.

    I think they should keep F class. Maybe they could make more profit making space for J and Y seats, but they get quite nice publicity, drawing people to other classes of the airline. Kinda like Emirates has this exclusive brand because of their blingy F class, even though they might not be anywhere close to be the best J or Y.

    If they want to reduce cost, do something that really matter. Garuda is wasting enormous amount of fuel on a dayly basis. They configure early, thus wasting loads of fuel on approach. Their crew is payed by actual block time (gate to gate basically), so they taxi slow, they fly flow and low, resulting in burning fuel, but getting higher salary.
    Noone want to be behind them on a taxi way, they causes traffic jams. They fly low, hardly ever optimal altitude and bring huge amounts of fuel extra. Most companies has strict fuel economy procedures. Faruda has none, and they fly very expensive.

    Stay with F, but rather get policies on fuel management and stop paying the crew actual block hours. Thats my advice.

  5. @Bill n DC: so you gotta stay away from airlines of other countries too, then? Have you read that Qatar, China, Japan, and the United States voted against the abolition of death penalty for LGBT people, so you’ll have to avoid EK, EY, QR, JL, NH, UA, DL, AA, and more by that logic. FOH with your holier-than-thou attitude. The state and the company are separate entities.

    @Mark: I don’t think having a First class is a prerequisite for Skytrax 5-star. BR has no F class yet they were crowned just last year. Also, I’m not sure I understand what you mean by “configure early”?

    Garuda now has 3 business class configurations for their widebody aeroplanes. The Stelia Solstys we see on their 777, the old 2x2x2 on their A330, and B/E Super Diamond for newer A330-300 planes. The trade off for reconfiguring their J class for the A330 is that there will be a reduction in seat count from 42 to just 24. If anything, in the future I expect them to install Apex Suites so as not to risk the seat count, but that might risk the level of personalisation that can be delivered by their crew.

    In any case, I don’t suppose we’ll see any major changes to their J class, as they deferred deliveries of new aircrafts until 2019.

  6. um, @Frank v, why are you reading a blog written by a gay man then? Oh, you hadn’t noticed?
    I guess YOU’RE the moron! And, by the way, you’re the sick one too. Find someplace else to spew your nastiness.

  7. The problem is frequent management changes leading to frequent strategy changes. It is the problem here with most SOE’’s, BOD gets appointed for a relatively short period of time.

    The previous BOD was better than the current one.

  8. That’s unfortunate GARUDA cutting their F class.
    And I assume GARUDA won’t be launching their LAX route anytime soon due to uncertainty. If they will launch CGK-LHR-CGK by Oct31st 2017 , why not considering CGK- LAX- CGK route as well since the level of safety been upgraded to Category 1 by US FAA last year??
    I believe the distance should be almost same miles flying distance .
    Come on Garuda Indonesia, why keep postponing your LAX route???

  9. @Mark
    I should also add one thing: they have horrible utilization on their widebodies. If you go to FR24, and check each aircraft:

    A330: PK-GP(L-Z),GH(A,C,D)
    B77W: PK-GI(A,C-K)

    You’ll notice that, especially on the A330-200s, they will often come in from a short flight such as Surabaya, a short 1h hop from Jakarta, at probably 7 or 8pm, and then only depart again at 10 or 11pm THE FOLLOWING DAY. The planes often spend an upward of 15-20 hours on the ground in Jakarta. Here’s one particularly bad example you can go and check right now:

    PK-GPL
    01 Oct GA425 Denpasar to Jakarta, arrived 10:41PM
    04 Oct GA824 Jakarta to Singapore, departed 6:18AM

    That plane spent all of 2 and 3 Oct doing, I assume, nothing.

    “Oh that could’ve been maintenance”

    PK-GPN
    02 Oct GA412 Jakarta to Denpasar, arrived 11:05PM
    04 Oct GA886 Denpasar to Chengdu, departed 8:22PM

    PK-GPP
    Has not flown any flights in the past week.

    PK-GPQ
    04 Oct GA878 Seoul to Jakarta, arrived 3:31PM
    07 Oct GA824 Jakarta to Singapore, departed 6:16AM

    Ugh, especially that last one: the plane spent 63 hours on the ground. Doing nothing. And this pattern has kept up since, at least, last July. And it doesn’t seem to end.

  10. Lucky, you might want to try Garuda’s long-haul business class product. They say it’s already so good that passengers don’t want to pay for first class. The meal service is ala-carte, no trays. The food is almost the same, except the plating and, and wines/beverages. This is also sad to hear. Why eliminate the entire F class cabin? Why not consider halving the cabin from 8 to 4 suites just like what Singapore did? They could at least still maintain their 5-star service. Although there have been significant cost-cuttings in F class: like the previous business class champagne Billecart-Salmon Rose, is now the second champagne in F class replacing Laurent-Perrier Cuvee Rose.

  11. @razza the only way that the average person has to fight homophobia, government sponsored or other, is with their wallets. Given Garuda is majority owned by the government, then yes why not encourage people to use other airlines as a means of protest? And how do you know the OP doesn’t avoid airlines /countries with state sponsored homophobia? A lot of people do. And what if he had replaced persecution of homosexuals with persecution of their religious minorities? Would that still be holier than thou? Or would that be ok with you?

  12. honestly, being a top tier status in garuda and previously top tier in aa and ua, i can tell their loyalty program, sucks.

    Nobody care about flying with them anymore and choose the cheapest option between garuda and batik air (full service by lion air). Even crazier, batik C is frequently cheaper than garuda Y. I strongly feel the should keep their F and rebuild their loyalty program completely

  13. Lol. Garuda is a state owned company. Thus, the management is a reflection of the current administration. Full of confused people on what to do, ends up destroying the already good establishment.

  14. @W how do you check those records for each airplane? That is really fascinating information, plus amazing you are able to do that as well.

    How do they have so much money to be able to use their planes in that way?

    I wonder if there is a way to compare the usage of different A330s in the region. For example, how Singapore uses their A330s vs. Garuda’s, Air Asia X’s, Thai’s, Cathay’s, etc. That would be super interesting to compare and contrast and perform calculations on.

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