Garuda Indonesia Part 2: US expansion, starting with Los Angeles, will be challenging and risky
Garuda Indonesia is preparing to launch flights to Los Angeles in 2017, contingent on Indonesian authorities securing an expected upgrade from the US FAA to a Category 1 safety rating. US flights represent the biggest – and riskiest – step in an overall strategic initiative by Garuda to boost its international presence.
Garuda's brand is not known in the US market, which it has not served for two decades, and it will have to overcome intense competition. Garuda will be only the third Southeast Asian airline in the US market, following the suspension of Los Angeles by Thai Airways and Malaysia Airlines. However, Los Angeles is very well served by North Asian airlines – most of which offer connections in the Indonesia-US market – and the withdrawal of Thai Airways and Malaysia Airlines speaks to the challenges that Garuda will confront.
Garuda was initially hoping to serve Jakarta-Los Angeles nonstop, which would enable it to differentiate its product. However, Garuda now realises that it will at least initially have to settle on a one-stop product via Tokyo. Garuda will benefit from the ability to carry local passengers between the Japan and the US, but Tokyo-Los Angeles is an extremely competitive route.
To access CAPA Premium Analysis you need a CAPA Membership
Your window into the latest insights
CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.
Big picture strategic view
Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.
The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.
Customise your Alerts
CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.
I'm very impressed by the factual and detailed analysis CAPA is always doing.- CEO, Airline Member
Phone: +61 2 9241 3200 | Email: email@example.com