All seems well with Garuda’s Quantum Leap program. The profit seems to be sustainable and the accolades keep coming, but signs of confusion are beginning to show particularly in the sub-100 seat market Garuda is currently aiming to penetrate. While the mainline domestic and international sectors are enjoying the quantum leap, is the secondary sub-100 seat market strategy by Garuda facing quantum confusion?
 
Garuda’s commitment to enter the secondary market (100 seats or lower) was made when it signed for 6 CRJ1000NG with options for 18 more. Talk with several insiders and all does not seem well with this market from the very beginning. The inaugural CRJ1000NG flight from Makassar to Denpasar was alleged by some to have suffered from an engine failure after take off and the flight continued due to the PR importance of the flight. This allegation cannot be verified but can probably be taken as a sign of problems in the CRJ’s suitability for Garuda’s operations.
 
With no announcements that it will take the 18 options for the CRJ1000NGs, Garuda then announced that it would take 70-seater propeller aircraft to further enter the smaller markets and had decided on the ATR72-600. However, then came the news that the ATRs would be operated by its LCC subsidiary, Citilink.
 
As delivery of the ATRs loom, Citilink began to recruit ATR qualified pilots, targetting Indonesian expat pilots flying ATRs in India and Malaysia. Following this process, the Indonesian DGCA was also involved in persuading the expat pilots to come home to “help build” the propeller market for major carriers. So they went home.
 
Unfortunately, once they arrived at Citilink, news came that now Garuda will take over the operations of the ATR72-600 ordered by Citilink, announced on 8 June. Strangely enough, the ATRs will be based at cities originally planned to be CRJ1000NG bases. To further add to the mess, Garuda will not take the ATR pilots Citilink had recruited.
 
The guys Citilink recruited are obviously unhappy. As a consolation, they are offered to fly on Citilink’s A320 instead. Unfortunately, this would mean that the ATR captains will have to spend sometime on the right hand seat flying as co-pilots to gain some pure-jet time before they can fly the A320 from the left seat, which for some would mean they are going to earn less than their previous jobs before they moved to Citilink. New ab-initio pilots recruited by Citilink for the ATRs also had to endure a period of uncertainty as it was initially thought that their contracts would be transferred to Garuda, but are now back with Citilink and likely to be destined for the A320.
 
This may sound nice for Citilink’s A320 operations which is chronically short of pilots, but unfortunately, Citilink’s A320 pilot shortage is due to the lack of A320 Type Rating Examiners to pass pilots’ type rating training on the A320, so those ATR guys will have some waiting to do as Citilink churns out new A320 qualified pilots at an excruciatingly slow pace.
 
It appears that to complete the Quantum Leap, Garuda is focusing on growth and market share which is dominated by Lion Air group (Lion Air on the low fare, start-up Batik Air on the full service, and Wings Air on the sub-100 seat market), alongside with many secondary market players vying for any dominant positions that remain in those markets. 
 
The story of the ATRs may point to the philosophy of “market share first and everything comes second”, but with no clear and coherent strategic commitment on how to achieve its aims. Such lack of coherence is a stark contrast to Wings Air’s strategy which has been consistent throughout the deployment of the ATR72-500s and is set to grow with the incoming ATR72-600s, and if such confusion continue, Garuda’s foray into the sub-100 seat market could end up as quantum confusion and stand no chance against Wings Air.
 
Thanks to Garuda’s seemingly quantum confusion on sub-100 seat market strategy, Citilink is now ‘punished’ with having to decide on what to do with the pilots it recruited for the aircraft now taken away by Garuda. For Citilink to resolve the situation, it would require more investments to train them for the A320 or even just to cancel their contracts, therefore Garuda has added cost burdens to Citilink which is an LCC trying to grow in a very competitive LCC environment.

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