Garuda Indonesia on a roll

At the Singapore Airshow, I had to opportunity to interview the CEO of Garuda Indonesia – Emirsyah Satar at the CNBC studios and it was quite a revelation (see video below).

After churning a healthy $66 million profit in 2008 (after years of losses!), going through a major re-branding effort and ordering brand new Boeing 777s,  Garuda Indonesia is set to start an LCC, CityLink, have an IPO this summer and re-launch flights to Europe at the same time. It’s certainly a brand on a roll, and kudos to Mr Satar for championing the turn-around. Though, work still needs to be done.

A brand that needs to re-build trust

As we discussed in the interview, the Garuda Indonesia brand suffered setbacks after a few of crashes between 1997-2007, resulting in a ban from the EU for all Indonesian airlines to fly to the continent. Although the ban has been lifted since June last year, and Garuda has its safety certified by IATA, perceptions from the past linger in the minds of travelers, especially Europeans.

So, what can the airline do to re-build the brand and ensure that its European operations are successful? Here are some ideas.

How can Garuda Indonesia fill up the planes from Europe?

1. Going beyond ITB Berlin. Mr Satar mentioned that Garuda will be heading to ITB Berlin for re-establishing relationships with the travel agents. But that’s only part of the battle won. At the same time, it’s crucial to win the trust of the potential customers who will fly the airline, and promise them a unique and safe experience. How about partnering with the Indonesia Tourism Board to jointly drive traffic, by offering a uniquely Indonesian in-flight experience? I’d love a Balinese massage in the Business lounge, or Chicken Redang on-board

    

2. Build relationships directly with the customer – I’ve emphasized that there’s a need to build trust with the customers. How about building a micro-site where travelers share their experiences on-board Garuda Indonesia? This can then be followed up with a Facebook fanpage or even a Twitter account that has Q&A sessions directly with the CEO. Allowing the faces behind the brand to connect with the customers would make the airline feel more welcoming. For inspiration, they need to look just across the Malacca Straits to AirAsia, and see how they’re doing such a great job building their brand in new markets.
3. Go deep, not wide. Mr Satar spoke about starting London, Paris, Amsterdam and more cities in Europe. Though, I’d say that focus on a few cities, rather than spreading itself out over multiple European capitals would be better for yields as well as market penetration. So, double-daily London flights might work better than a daily flight to London, and another daily to Amsterdam. This is even more relevant, since Garuda currently doesn’t have any European airline partners, to feed its long-haul flights.
4. Offer something unique. How about direct flights to Bali from London, as opposed to Jakarta? If Garuda is competing on price, then it’s mostly going to attract the leisure traveler. And more of these are headed to Bali, than Jakarta. The good news is that Garuda also has a hub in Bali, so the passengers can easily connect to other destinations too. Garuda needs to stand out from the competition in order to sustain its long haul flights.
5. Dubai as a mini-hub. Untill the B777s arrive, Garuda will be flying to Europe on their A330s, with all flights being via Dubai. It will be a good idea to start cultivating some airline partnerships with regional Middle East carriers, like Oman Air or even GulfAir, to drive traffic from Dubai-Indonesia and vice-versa.

It’s good to see the strong revival of another Asian airline brand, and I hope Garuda Indonesia will be successful. For that to happen, they need to build bonds with the customers, personally.

What do you think? Would you fly Garuda Indonesia if they came to your city? Other than price, how can they entice you to fly them? Let’s hear it in the comments, or on Twitter (@simpliFlying)

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Garuda Indonesia, the national airline of Indonesia, suffered a setback recently. Indra Setiawan, a former CEO of the airline was sentenced to 12 months in prison for his part in the mid-air killing of a human rights activist. From a branding perspective, this just rubs salts in the already-wounded brand image of Garuda – since it already has one of the worst airline safety track records in Asia. The airline is leaving few options for its customers to form a positive perception.
Probably the only way they can resurrect the brand is to win on price competition, while still remaining full service, and impress the customers – a tough bet, given their track record. May be the new planes they ordered at the Singapore Airshow recently will help them rescue the brand with new routes to US and Europe, at good prices (and of course, the new planes). Airlines – and other worthy brands (Apple?)- must always be vary of coupling themselves too tightly with an individual. Although this can be a huge X-Factor for the brand, which differentiates it with other airlines, it can be a risky proposition.

Nevertheless, many airlines have used it to their advantage in the past – from Richard Branson of Virgin, to the upcoming Vijay Mallya of Kingfisher Airlines in India. These iconic figures have traditionally brought great leverage to the brand. But being so closely associated can be risky, since the smallest of the person’s actions will have consequences much larger in magnitude for the airline as well.

A better strategy is to create an icon – like the SIA Girl, of Singapore Airlines – which can be a controlled by the airline management as and when they wish, rather than be exposed to risks individuals face. Moreover, it can act as a reliable X-Factor, something that goes above and beyond what “yet another airline” would do to boost its brand image.

Ponder that!

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