Garuda CEO says flights from Indonesia to U.S. will be significant revenue generator in 2017

Garuda Indonesia, the country’s national carrier, expects its return to the United States next year with three flights a week to generate about 5 percent of the airline’s top-line passenger revenue for 2017, its chief executive said.

The airline is now negotiating rights to start service from Jakarta to Los Angeles via Japan, Chief Executive Officer Arif Wibowo said in an interview. He said the new flights would be a “milestone” for Garuda, which reported $3.81 billion in total operating revenues in 2015.

Garuda’s plans follow an August announcement by the U.S. Federal Aviation Administration (FAA) that Indonesia’s aviation safety performance now meets international standards, allowing its carriers to fly to the United States.

The FAA removed the ability of the country’s carriers to fly to the United States in 2007. The southeast Asian nation has struggled with a patchy aviation record.

Garuda is also considering a route to New York via Europe, where it flies to Amsterdam and London.

“What we are aiming is to … grab market between Indonesia and the U.S.,” Wibowo told Reuters late Thursday on the sidelines of a United Nations aviation assembly in Montreal.

“We can start from three flights per week. Eventually we are also aiming to become a daily flight.”

Traffic between the United States and Indonesia is about 400,000 passengers a year, he said.

Garuda is publicly traded but the Indonesian government is its largest shareholder with a 60 percent stake.

The fast-growing carrier is in negotiations with planemaker Boeing Co and rival Airbus Group SEfor at least 22 widebody planes to replace A330s that the carrier has on an operating lease, Wibowo said.

 (Editing by Jeffrey Benkoe)

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