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Garuda Indonesia CEO says to step down around year-end
[SINGAPORE] Emirsyah Satar said on Friday he would step down as chief executive of Garuda Indonesia within months after a decade-long stint during which he helped repair the image of the loss-making Indonesian flag carrier and restructure operations.
Mr Satar told Reuters in an interview that he will leave Garuda because current regulations prevent any CEO from serving more than two, five-year terms. He said he would step down late this year or early next year, after a shareholders' meeting.
In the few months he will remain at Garuda, Mr Satar said he would focus on ensuring the growth of its loss-making budget unit Citilink.
In September, Garuda postponed a plan to sell a stake in the budget carrier, which competes with privately held airline Lion Air at home and other Southeast Asian low-cost airlines such as Malaysia's AirAsia Bhd in the cut-throat Indonesian market.
"We see that the market is growing but the budget travellers' growth is higher than the premium, where Garuda is," he said. "When passengers pick an airline, they want to see frequencies, network coverage. Therefore, size matters and therefore right now, we are really pushing Citilink to grow."
For Garuda, Mr Satar said the plan was to contain operating costs. Garuda posted a first-half loss, but analysts say signs of improving ticket prices and yields in its second quarter could help the company turn around later this year.
Garuda, which confirmed an order for 50 Boeing 737 Max aircraft worth US$4.9 billion at list prices this month, also has no plans to buy additional widebody planes for medium and long-haul services, he added.
Before Mr Satar's term, Garuda was a loss-making state-owned airline with an uncertain safety record. The airline managed to improve its image under his stewardship, and now boasts a modern fleet of Boeing and Airbus planes.
In 2011, Garuda became listed on the Jakarta Stock Exchange. Three years later, it became a member of the SkyTeam alliance of carriers which includes German carrier Lufthansa and Singapore Airlines, further helping to improve its image.
Mr Satar said he expects competition to spur consolidation among airlines in Indonesia. He said there were likely to be just three or four strong carriers in a few years compared to 10-15 airlines now.
The former finance industry executive, who also sits on the board of an Indonesian bank, added he had yet to decide on his next move after leaving the airline.