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Garuda Shrinks

Lacking Both Timing & Grace - Garuda Cancels Frankfurt and London Services.

(1/28/2002) After a late and faltering start, it seemed Indonesia was finally managing to reassert itself on the world tourism stage. A $9 million "Just a Smile Away" campaign by Indonesia's Tourism Department is underway with 10-year-old singing star, Sherlina, singing a welcome across the archipelago. Yogyakarta, under the able leadership of its much-loved Sultan and Governor, Sri Sultan Hamengku Buwono X, went to tremendous expense and sacrifice to make the ASEAN Tourism Forum, a success, including the building of a multi-million dollar convention center to host the event. In fact, cautious optimism was again becoming fashionable as the events of September 11 faded and agents signaled long haul flight bookings were starting to pick up after the Christmas - New Year's holiday break.

But, then, with a sense of timing and place that defies description, Garuda's vice-president marketing planning, Mr. Marco Umbas, dropped a bombshell at the ASEAN Tourism Forum (ATF) by announcing that the airline would almost immediately suspend its services to London and Frankfurt. This leaves Amsterdam as the sole remaining European destination served by Indonesia's national carrier.

Garuda's apologetic addendum, that the suspension was perhaps only "temporary" and that some of the services might be re-introduced later this year only served to further confuse the market. Ironically, the cancellation decision Mr. Umbas painted as necessary to "stabilize confidence in Grauda," has, to some effect, had just the opposite result with many international travel wholesalers from the United Kingdom attending ATF strongly critical of Garuda's sudden withdrawal from programs in which they had invested substantially to promote. One U.K. operator quoted in the ATF daily, Travel Weekly East report by Luke Clarke saying, "The confidence in the airline has gone down overnight, and being offline now does not bode well for a late June relaunch as the time to sell is now. I do not feel the blow I have received is going to give me confidence in selling Garuda unless I get personal assurances that this will not happen again in six months time."

Chances that other airlines will take up the slack created by Garuda's sudden withdrawal are unlikely. The economic realities of current airline operations make route expansion for any airline a remote possibility in the short to medium term. In addition, it is widely suspected that Indonesian civil aviation authorities will continue a restrictive regime on granting air access to Indonesia for overseas carriers, trying to protect the future interests of the national carrier for some unspecified point in the future when, and if, Garuda decides to renew some of their now cancelled European routes.