Five ideas for Garuda Indonesia to drive demand from Europe, by rebuilding its brand (Plus: Interview with CEO Emirsyah Satar)

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,Β  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 πŸ™‚ 
  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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Showing 18 comments
  • Rafael S.

    Open their online booking tool to international flights and actually have a payment gateway online. I flew Garuda from Singapore to Bali once and I had to print a form, write my credit card details and send it back to them via e-mail. Very secure online payment method!

    And in Europe people don’t use travel agents as often as people use in Asia, so online booking and payment is mandatory for their success.

    They should also think about that song they play several times in the airplane before take-off and after landing.

  • Rafael S.

    Open their online booking tool to international flights and actually have a payment gateway online. I flew Garuda from Singapore to Bali once and I had to print a form, write my credit card details and send it back to them via e-mail. Very secure online payment method!

    And in Europe people don’t use travel agents as often as people use in Asia, so online booking and payment is mandatory for their success.

    They should also think about that song they play several times in the airplane before take-off and after landing.

  • Bruce Sweigert

    Going up against the big Middle East carriers in DXB is going to be a huge challenge – as AirAsia X found out in AUH.

    • adamgollam

      Indonesia is a very fast paced country that want to grow and I'm actually thinking about moving there. It's better than my own country and the scenery is beautiful.

  • facebook-558733588

    I was on board the Garuda aircraft which was at the Singapore Airshow and had the chance to speak with some of the cabin crew members about the new Garuda Indonesia Experience they're advertising. I can say that the crew members are very proud of the changes planned to be introduced.

    As much as I love the new image branding and service they're introducing, it has to improve on it's poor image & perception that many have. Unfortunately in Singapore, Garuda's one of the last options for many to travel to Indonesia. Unless they do something like suggestions 1 & 2 or something radical, the efforts made by its marketing team to promote Garuda could flounder after a while.

    The LCC subsidiary CityLink already existed a few years ago using Fokker aircrafts before the restructuring. Now that it's being brought back, it could face tough competition from Lion Air, Air Asia and Mandala. Good luck to them though.

  • vimalrai

    Garuda unfort'ly suffers the negativity associated with Indonesia and its other air carriers. In Asia, carriers from Indon have possibly the worst safety record. Research has proven that safety is the no.1 consideration and decision driver. I wish them the best, but again, using DXB as a hub is really taking the difficult route, unless they are getting “help” for being the national carrier of an Islamic country. How far can that go? Your guess as good as mine when u have all the Gulf carriers also competing within that arena. It will mean higher SPAs, worse terms on codeshares etc. Not sure if this is the right strategy. Having said that, I guess choices for hubs for them are limited. Once they get their 777ERs in it shd help.

  • Chris Englund

    I think flying to Amsterdam would be a first step in the right direction. The company is clearly missing out on an incredible opportunity to fulfill the needs of Indonesia's largest immigrant community abroad. Seriously, every other person in Holland is of Indonesian decent and tons of Dutch love taking the vacations there. Instead of choice we have to make a stopover in SIN or KUL. Why oh why would Garuda pass up on this instantly successful opportunity?

  • Yogesh Pagar

    Tourism Board-Indonesia must extend their cultural taste in Garuda's 2010 plans. Garuda can never succeed with their services & pricing alone.

    • Shashank Nigam

      Great point Yogesh. I hope to see such collaboration too.

      • Firdaus Hashim

        Why not direct this entry to it's CEO and their marketing department? They really need to do something about it.

        One thing you could highlight is the inability to book it's tickets online on international routes. It's one major bugbear which entails a visit to their office but it doesn't leave a good impression to the tech savvy customers who prefer to compare fares between various airlines.

  • PasqualinaPetruccio

    Re-building trust for an airline has to be one of the most difficult things an airline would ever have to do. This cannot be done overnight, nevertheless with the correct usage of advertising, PR and social media; the process could be made easier and quicker.

    I. A partnership with Indonesia Tourism Board to jointly drive traffic, by offering a uniquely Indonesian in-flight experience; good idea but why not take it one step further a unique experience in Bali. Destination and experiences only offered via Garuda

    II. Twitter, Facebook and blog build the relationship and trust. However, it has to be done well and if they genuinely want to engage; deal with any criticism and fear in an honest, but truthful and caring manner, whilst maintaining professional and friendly stance.

    III. Historically the ties between Holland and Indonesia would make Amsterdam the most logical of European airport; Holland also has the largest population of Indonesians. Becoming a member of one of the alliances – Sky Team, etc, as that would not only restore confidence, as people perception of a brand is greatly improved if they are partnered with brands that are respected and trusted. This would also help to feed into their long-haul.

    IV. Europe directly to Bali; such a popular detestation has very few direct flights, only recently have KLM started flying directly to Bali, so this could pay dividends.

    V. DXB – as Bruce Sweigert mention going against the Middle East carriers would be challenging, once they have the 777’s then it’s a different story.

    Garuda like any brand can recover; however, it will take time and they need the right professionals to help them achieve and restore trust.

  • worldpolita

    Thank you Shashank for this interesting post,

    In my opinion priorities are:

    First of all being competitive from ONE IMPORTANT EUR HUB; I understand that AMSTERDAM, could be interesting, even if personally I don't exclude LONDON.

    Second a direct flight to Bali looks really actractive mainly for leisure travel and for the kharisma of this site (even if terrorist attack had ruined this destination brand identity); evalue its frequency and the opportunity to use a regional carrier in conjunction to a main hub like Singapore, could be more rational.

    Third chronological, but first in importance, I think today airlines are commodities; today market (particularly in recession time), is subject to a very price sensitive demand;
    hence, in line with your correct proposition about dont'be dispersive (I read “don't produce overcapacity”), it's really CRUCIAL TO DEVELOPE A SERIOUS RMS, able to be adaptive and make good demand forecast of course, but also to mange properly multiple prices (and roles), in a way to attract low price demand;
    in today marketplace it's imperative giving optimal allocation without lose high yeald inelastic demand; a system able to save money checking double third parties reservations (GDS, T.a.) must prevent spoilage.

    Fourth, manage the weakness of bad brand reputation connected to axcidents occured, outsourcing scheduled controls to a primary brand with a frequency to permit to distinguish the Garuda Security Standard Control like the NEW WORLD WIDE STANDARD.

    Five, use all the social networks to communicate benefits of Flying secure with Garuda brand on the principal Eur countries strategically required; to associate this job with other customer benefits communication, for ex. with EXTENSIVE FFP earned also from other carriers. To use some typical LCC leverage connected to adoption of ancillary revenues to gain profits mantaining low price (coherently with well known Oriental standard of services); for ex. managing different classes with more restrictions in order to free allowed weight luggages, on board catering, tkt refound rules and restrictions.

    • Shashank Nigam

      @worldpolita – you have great suggestions there. Especially about not
      excluding London, just because of the sheer size of the hub. I just
      hope someone from Garuda is looking and putting all this on a
      timeline πŸ™‚

  • Patria Bayuaji

    Garuda must have comprehensive marketing plan with Travel and Tourism Promotion Board…pity for country like Indonesia (my own country!) unable to generate tourist from such wide variety of tourist attractions and places…

  • Tobias Rueckerl

    In Europe, Garuda was always known as a comfortable, reliable carrier.
    Since it was black listed and also since the terror threads in Indonesia, it became much more difficult to operate profitable. In between their appeared also LCCs in Indionesia, another battle field for Garuda.
    However, the ban inti the EU was lifted in mid 2009 and now Garuda should start to re-establish their links to Europe, especially to Amsterdam and Frankfurt. I understand that they will start with AMS soon with A330 having a tech stop in DXB.
    The challenge is the still existing financial crisis and a poor travel market. Possibly it is a good time to invest now in new routes to Europe being established again in the European market when the economy, and with it the travel market, will recover.

  • Roland Blaney

    I also think that there is a great opportunity for a route from Indonesia to Ras Al Khaimah, where there is evidence of Indonesian trade and labourer growth to the UAE, given that the Philipines are considering restructing their nationals from working in the Middle East.

  • rajeev upmanyu

    To my opinion Garuda should start its operations to a destination where economy is booming & people are crazy to see new destination.
    India is a very good option & Bali can be promoted at the top level.
    Even I can foresee minimum 15 to 20K passengers in a year.
    This is not a bad figure to start with.
    I hope you will agree with me.

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