Garuda Plans to Cover Gap After JAL Cuts Bali Routes

Jakarta Globe, Made Arya Kencana, Ardian Wibisono & Yessar Rossendar, May 10, 2010

Amid a massive restructuring, Japan Airlines has decided to trim unprofitable routes, including to Bali. The planned cancellation will leave Garuda the only carrier flying from Japan to the resort island of Bali. (EPA Photo)

National flag carrier PT Garuda Indonesia announced on Monday that it was ready to fill the void after ailing Japan Airlines canceled its routes to Bali this year.

Kiyoshi Tanaka, a JAL representative in Bali, said on Monday that the bankrupt airline’s massive restructuring had prompted it to cut less-profitable routes, including to Bali, which have already showed a decrease in passenger numbers. He said JAL’s daily Tokyo-Denpasar and Osaka-Denpasar would be eliminated by Oct. 1, leaving Garuda the only carrier flying between Japan and the resort island.

Pujobroto, Garuda’s corporate secretary, said on Monday after JAL’s announcement that the Indonesian carrier would raise its Osaka-Denpasar flights from four times a week to five starting in November. Garuda also provides once-daily Denpasar-Tokyo service and three Denpasar-Nagoya flights per week.

“The flights from Denpasar to Japan will use Airbus 330-300 aircraft,” Pujobroto said.

Pujobroto also added that Garuda was planning daily Jakarta-Tokyo service in September.

JAL, Asia’s biggest carrier, declared bankruptcy in January under $6 billion of debt. Poor management and out-of-control costs, as well as unprofitable routes, were all factors leading to one of Japan’s biggest corporate busts.

Its troubles were also compounded by the global financial downturn, which decimated travel demand for its extensive international flight network.

According to the Central Statistics Agency (BPS), the number of visitors from Japan to Bali dropped 22 percent to 65,059 in the first quarter from the year-earlier period.

JAL currently has two daily routes to Bali, Tokyo-Denpasar and JAL 715 Osaka-Denpasar.

Heru Legowo, general manager of PT Angkasa Pura I Ngurah Rai, regretted JAL’s decision to stop the service, which it has flown for 10 years. He said the cancellation made little sense because the 400 passangers arrived on each flight as well as cargo, not to mention the fees JAL paid to the airport management firm.

“With the route closing, we will lose income of Rp 150 million [$16,500] a day,” Heru said.

Ida Bagus Ngurah Wijaya, chairman of Bali’s Tourism Board, said the closure would also cause tourist numbers to drop. Japan accounts for the third-largest number of visitors after Australia and China.

Ronn Nomura, sales and marketing officer of Grand Hyatt Hotel in Bali, said the impact had already begun to be felt.

“With the closure, we expect to lose 50 percent of our guests,” he said.