Capital A Bhd inked a memorandum of understanding with Garuda Indonesia Group to transform Asean travel and logistics, in line with strengthening the global aviation ecosystem.
JAKARTA: Capital A Bhd
, the holding company of low-cost carrier AirAsia, expects the potential of additional passengers as well as logistics opportunities from its partnership with Garuda Indonesia Group.
Capital A chief executive officer Tan Sri Tony Fernandes said despite not being able to quantify the numbers, he is confident that growth would be likely.
“We are both public companies, so very soon you can see the progress. I am also sure that Capital A and Garuda Indonesia will be proud to announce the success of this collaboration,” he told a press conference of the signing of the memorandum of understanding here on Wednesday.
He said the success rate could be measured through the number of new passengers, revenue as well as additional cargoes.
“We have the business. The collaboration between GMF AeroAsia, a subsidiary of Garuda Indonesia, and Asia Digital Engineering Sdn Bhd (ADE), which is owned by Capital A, would not have existed before this.
“We have not really quantified it yet, but the potential in terms of passenger numbers is around tens of millions,” he added.
In terms of logistics, Teleport chief executive officer Pete Chareonwongsak said he had sent a proposal to Garuda Indonesia saying that through the collaboration, the group would be able to generate an additional 25% to the business value.
“It is really vital to connect our Asean region better. So on the logistics side, I am really excited and hope we can prove the numbers to Garuda Indonesia,” he said.
He said the collaboration was aimed at creating value and business opportunities.
“The aviation, logistics, and cargo industry is a tough space to work together.
“We want to pave the way and work with everybody. Hopefully after working together, we are able to see value being created,” Chareonwongsak said.
Garuda Indonesia president and chief executive officer Irfan Setiaputra also welcomed the partnership.
“When we feel the energy and synergy,” he said.
Fernandes said the aviation industry is a big economic-driver in the region, especially in terms of tourism, bringing businesses together and adding logistics.
“When it comes to logistics, I think the potential of Indonesian products going around the world and Malaysian products entering Indonesia is a massive improvement for both countries,” he said.
The possibility of bringing two airlines together will also increase the number of flights and connections, according to Fernandes.
“It is not about competing, instead the collaboration can bring about great economic growth for both countries,” he said.
Fernandes added that the group remains open for any collaboration with local airlines in Malaysia.
Additional routes can be expected following the collaboration between Citilink, a low-cost airline of Garuda Indonesia, and AirAsia.
“We are strong in Indonesia, but we do not have a big domestic network. Citilink has 56 aircraft that go to many destinations. So, this ‘marriage’ makes a lot of sense,” he said.
Several routes are expected to be launched in the first quarter of 2024.
The partnership with Capital A and Garuda will involve commercial airline services between AirAsia Group and Citilink, logistic services with Teleport and Garuda Indonesia Cargo as well as maintenance repair and overhaul (MRO) services with ADE and GMF AeroAsia.
Teleport and Garuda will transport goods between their networks of 160 locations in Asia-Pacific and more than 90 destinations internationally.
ADE and GMF AeroAsia will explore opportunities to provide maintenance assistance with value-driven and affordable MRO services to third-party airlines.
