Garuda Indonesia 2017 outlook: should avoid being dazzled by long haul - instead leverage partners

Premium Analysis

Garuda Indonesia is planning to double the size of its long haul network in 2017 with new services to Moscow and Los Angeles. Garuda had historically been focused on short and medium haul markets; Amsterdam and London Heathrow are its only current destinations outside Asia Pacific or the Middle East.

Heathrow was launched in Mar-2016 as part of a new international push. For the only time this decade, Garuda pursued faster international than domestic ASK growth in 2016. This trend will continue in 2017 as Garuda continues to expand both its regional and long haul international operations.

Long haul expansion is viewed as strategic, but comes with high costs and big risks. Garuda would be better off shelving plans for Moscow and Los Angeles and focusing on opportunities in Asia – particularly China and India.

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