The Indonesian low-cost carrier has announced an ambitious expansion plan – two new routes that would connect Indonesia to Frankfurt and Jeddah.
Citilink plans to operate the flights using Airbus A330neo aircraft, that according to Airbus‘ Orders and Deliveries File, is yet to be delivered.
Speaking from Garuda Indonesia headquarters, the CEO of Citilink Juliandra Nurtjahjo said that “Frankfurt and Jeddah are potential destinations that will be developed. We will introduce the inaugural flights in October and December.”
Newest Citilink developments
The two cities are just only a small part of the newest Citilink strategy. The low-cost airline also plans to expand its route network to several Australian cities and Vietnam, pending approval for its flight permits to those two mentioned countries.
Garuda Indonesia, the parent company of Citilink, will transfer some of the A330-900 orders to its low-cost subsidiary. The national flag carrier of Indonesia ordered the A330neo aircraft back in April of 2016 when the airline replaced its older order of seven Airbus A330 to the A330neo and opted-in for seven more aircraft of the same type.
Citilink is quoted to operate the Airbus A330neo in a layout that will consist of 42 premium economy and 323 economy seats, according to ch-aviation.
Meanwhile, Cebu Air Pacific, another low-cost airline from the South East Asia region has also opted for the A330neo for its long haul operations. However, Airbus and Cebu Air Pacific have announced that the Airbus A330-900 will seat 460 (!) passengers.
Nevertheless, the move to expand the Citilink route network into long-haul operations can be questioned.
Garuda Indonesia and Citilink losses
Amidst continuing financial struggles, Garuda has started to cut its costs to reduce losses and return to profitability. Last September the parent airline of Citilink ditched plans to earn a profit, even though Garuda Indonesia significantly reduced its costs. During the first half of the year in 2018, Garuda Indonesia reported a net loss of $116 million. The airline is yet to announce its final statement of 2018, as Indonesian Financial Services Authority has found errors in the report, Garuda Indonesia themselves have announced in a recent press release.
In addition, Garuda Indonesia is canceling its direct route from Jakarta to London after the summer, the only direct connection between the two cities. The Indonesian airline will also reduce the frequency of flights between Amsterdam and Jakarta.
The subsidiary low-cost carrier, Citilink is not having the best time of their lives either. While the airline is yet to publish its financial statements of FY 2018, Citilink has posted losses in 2014, 2016 and 2017. Furthermore, 2017 was the worst year during the same period, as the airline’s costs spiraled out of control – from $509 million in 2016 to $648 million in 2017.
Thus, the newest route expansion might be a bit more than Citilink can chew, as a lot of airlines around the world have struggled to operate low-cost long-haul routes profitably. WOW Air and Primera Air bankruptcies, amongst other airlines making severe losses have put a lot of doubt in everyone’s mind whether low-cost flights that fly very long distances is a viable strategy.
Nevertheless, the new destinations to Frankfurt and Jeddah won’t be the only international routes that Citilink will operate. The low-cost carrier also flies to Penang and Kuala Lumpur in Malaysia, Phnom Penh in Cambodia and Kunming in China.
While neither Garuda nor Citilink currently flies to Frankfurt, the two airlines will overlap their network in Jeddah, as Garuda flies from Jakarta to Jeddah on flight GA 980.