Citilink is planning more rapid domestic expansion in 2016 as the Garuda Indonesia low cost subsidiary adds eight A320s for a total of 44 aircraft. Capacity is expected to grow by approximately 30% for the third consecutive year as Citilink continues its push to grab more domestic market share despite relatively sluggish demand.
Nearly all of the additional capacity in 2016 will have to be allocated to secondary bases, including possible new bases at Medan and Makassar, due to slot constraints at Jakarta, Bali and Surabaya. Profitability, which Citilink has achieved for the first time over the last year, could come under pressure as routes connecting Indonesian secondary cities are typically lower yielding.
Citilink is now evaluating converting some of its A320neo orders into A321neos, a sensible move as it would enable the LCC to resume capacity expansion in Jakarta from 2017 even if it is unable to mount new flights from the Indonesian capital. Citilink now has 35 A320neos on order for delivery from 2017 to 2021 and is also considering the A321neoLR, which would enable it to reach eastern Australia and northern China. Citilink is purely a domestic carrier but aims to launch in late 2016 or 2017 international services within Southeast Asia and to Perth in Western Australia using existing A320ceos.
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