Citilink regional expansion will further intensify competition between Garuda Indonesia and Lion Air

Competition is to further intensify between leading Indonesian airline groups Garuda and Lion as Garuda accelerates expansion of its budget airline subsidiary Citilink to include regional domestic routes. Citilink now plans to operate a fleet of 80 aircraft by the end of 2015, including 30 70-seat turboprops, which should make it the second largest carrier in the Indonesian domestic market after Lion.

Citilink only carried 1.6 million domestic passengers in 2011, compared to 25 million for Lion and just over 12 million for Garuda mainline. But Garuda is committed to closing the gap with Lion, which became Indonesia's largest carrier in 2009, by focusing on rapid domestic growth at both ends of the market.

Closing the gap at the budget end of the market will not be easy as the Lion Air Group, which includes regional subsidiary Wings Air, has its own ambitious expansion plans. But Citilink's expansion comes off a much smaller base as the carrier is slated to end 2012 with a fleet of only 18 aircraft.