Garuda Indonesia Dropping Most International Service, Eliminating First Class

SkyTeam member Garuda Indonesia suffered greatly during the pandemic, including from government policies that banned most foreigners from coming to the country for an extended period of time. But it wasn’t Covid-19 that really did it in. They were forced to restructure $9.5 billion in debt earlier this year, citing in part “leasing costs way above the industry average” according to the country’s State Enterprises Minister.

Unmentioned, of course, are the charges that were brought against the airline’s former CEO over money laundering and millions of dollars worth of bribery in connection with overpaying for Airbus aircraft. Such things are common in South and Southeast Asia, especially in connection with government-backed carriers.

The airline has a new business model. They’re going to focus on domestic travel, and give up most international routes. That means reconfiguring planes and dropping first class, with business as their top cabin. Oddly they plan to run planes domestically not just with business but also with premium economy. They’ll otherwise rely on codeshares and partner airlines to bring passengers to Indonesia, and pick up the connecting traffic. Internationally they’ll retain just a few markets “including pilgrimage flights to Saudi Arabia.”

Oddly – or not so oddly – they’re… in the market to buy new planes despite the pullback, planning to grow “to 120 [aircraft] from 30, gradually returning to its pre-pandemic size.”

This is sad for the GarudaMiles program which used to offer outstanding value.

  • Their partner awards weren’t strong value, and domestic flights within Indonesia tend to be cheap given the proliferation of low cost carriers.

  • However with all of the empty seats they used to fly abroad, the GarudaMiles program occasionally offered exceptional value such as when they offered 90% off redemptions in all classes of service, a 70% off sale and 50% off all cabins on the Jakarta – London route.

Nonetheless, this is of limited relevance to those of us in the U.S. since Garuda’s transfer relationship with Citi ThankYou Rewards ended in summer 2019. Most people looking to redeem on Garuda Indonesia were well-advised to book through Amex transfer partner ANA, which was the partner (outside of SkyTeam!) with frequently the best redemption pricing.

(HT: @crucker)

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