Saturday, February 23, 2008


Garuda of Indonesia is in final talks to place a multi billion dollar order at next week's Singapore Air show and the announcement includes purchasing 10 B 777-200ERs + 25 B 737-800s + 10 B 787-800s. In the mid 1990s, GA originally placed an order for 6 B 772ERs but then the Asian financial crisis hit which ended up in the order being defered. As far as the B 738s are concerned, GA has already ordered 25 previously and these additional 25 are part of the "options" plan it had with Boeing. Lastly, the B 788 deal is basically a firm signing of an earlier MOU which was signed in 2005 between GA and Boeing.


Analysis :

Personally speaking, I'm not totally in favor GA's management ordering 10 B 772ERs exclusively as this aircraft type will be a detrimental factor for their long term growth. GA's board should instead seriously consider ordering a mixture of 7 B 772LRs and 3 B 773ERs. The reasons being that the latter will prove to be an ideal replacement for their entire fleet of B 744s four to five years down the road as its a more "cost effective" aircraft to use on high density flights to Japan, Europe & Middle East. You cannot replace a 410 seater B 744 with a 310 seater B 772ER as that is a huge capacity decrease particularly on routes to the Middle East which see high density demand year round. If GA want to increase the life span of their B 744s, they can later be converted into freighters as the country desperately needs a strong all cargo airline.

As far as why the B 772LR should have been ordered instead of the B 772ER is because of payload issues. The full capacity uplift of the B 77L would come in handy on long haul nonstop flights to LGW, FRA & AMS as there would be no payload problems year round. With the B 772ER, GA would suffer seasonal payload restrictions on nonstop flights bound to LGW & AMS especially. LGW would work well if GA flew DPS-CGK-LGW due to the high volume of DPS bound traffic year round from the Greater London Area. If GA fly daily into LGW from CGK, they should time their flights to connect with SYD/MEL/PER so that they can grab a small piece of the "Kangaroo route" market share with their one stop flights.

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