What a sad news to hear. Garuda Indonesia is considering discontinuing the First Class service to cut losses. Currently Garuda Indonesia serves First Class to certain destinations, such as London, Amsterdam, Tokyo, Jeddah. This comes to a shock as well, considering recently Garuda Indonesia announced direct flights to London on the Boeing 777-300ER.
It seems the strategic plan for Garuda Indonesia under the new CEO is service cuts and less expansion. The service cuts will aim at lowering the burgeoning operating cost. It includes cutbacks to the in-flight products, smaller portion meals, beverages options cut on business class. The airline will try to lower the labor cost and considering to discontinue the First Class service.
What a series of turn of events. From Garuda getting banned by EU in 2007. To a complete restructuring known as Quantum Leap by then CEO Emirsyah Satar, that earned Garuda the prestigious 5 Star rating from Skytrax. Earlier this year, Garuda announced its plan to resume flying to the United States, most probably to the West Coast. That plan seems gloomy now, especially in the first half of 2017, Garuda has suffered $215 million loss.
Airlines are particularly accustomed to service cuts and wide ranging of cost cutting. Recently Singapore Airlines is announcing more than 50 cost-cutting initiatives including renegotiating with key suppliers, reducing fuel burn and possible job cuts. However, scraping off First Class is unheard of.
In the public statement, Nina Sulistyowati, the airline’s director of marketing and information technology said that maintaining First Class involves high costs, and few customers are willing to shell out for such an expense. I have to disagree with her here.
First Class, unlike Economy class is not for everyone. Yes, not everyone will shell out IDR 171 million for a First Class trip to London. But is there demand for such premium and luxury product? Absolutely. Try to count how many times Syahrini has posted on Instagram on Singapore Airlines Suites vs Garuda Indonesia First Class. The key here is to win the market. And with the rise of middle income earners, more and more people will want to try the exclusive First Class. And don’t even get me started on Garuda Indonesia’s loyalty program, GarudaMiles. I do think Garuda Indonesia has a lot of work to do to make its products competitive, rather than scraping it off.
Do you agree Garuda Indonesia should cut First Class service altogether?
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