SINGAPORE - Indonesian flag carrier Garuda is "back in business" and pushing on with expansion, including a planned share sale, months after a European Union ban was lifted, the airline's chief said Wednesday.

The airline is proceeding with an initial public offering in February to fund the expansion, including the purchase of new aircraft, chief executive Emirsyah Satar said on the sidelines of an aviation forum in Singapore.

"In the past, what we were doing was setting the strong foundation," Satar said."Well, we are back in business," said Satar, who is also the airline's president.

All Indonesian airlines were banned from EU airspace in 2007 after a series of crashes and incidents exposed poor safety standards across the country's aviation industry.

But Garuda was cleared by European regulators in 2009 and it completed its first flight back to the continent in June, landing in Amsterdam.

That came soon after Garuda, which posted a net profit of more than 100 US million dollars last year, was named world's most improved airline by London-based research company Skytrax in May.

Garuda wants to raise 300 million dollars to strengthen its capital structure and help fund six new Airbus A330-200 aircraft valued at 1.15 billion dollars as part of its drive to expand.

Since his appointment in 2005, Satar has piloted the flag carrier's stunning turnaround in fortune as he undertook a massive exercise to nurse the airline back to health.

He said regaining permission to fly to Europe was crucial for the company's reputation.

"If you look at the revenue contribution, (it) will not be significant... You are only talking about one route, Amsterdam, but symbolically we are back as a safe airline," he said.

The carrier is aiming to ride on growth in air travel demand, especially within Asia-Pacific, which has already overtaken North America as the world's largest market, with 647 million travellers last year.

Garuda also has its eyes on the huge domestic market, where Satar said there is plenty of untapped potential, adding that its growth plans were domestic and international.

The carrier wants to expand its international destinations from 18 two years ago to 28 by 2014 and raise the number of domestic routes to 34 from 23 over the same period.

China, Japan, South Korea, Australia and the Middle East are among the key markets and offer plenty of growth potential because of trade and tourism, Satar said .

"Right now, we follow where the trade and... where the tourist growth is," he added.

In his keynote speech at the Aviation Outlook Asia forum, Satar said the carrier was targetting to fly close to 28 million passengers by 2014 under its "Quantum Leap" plan, compared with 10 million two years ago.

He also wants to expand the carrier's fleet to 116 aircraft in four years' time from 54 in 2008.

Looking back five years when Garuda was suffering financial problems, Satar said it had no choice but to make tough decisions, including shedding staff and streamlining the company.

But apart from losing money, Garuda was facing huge debts, poor aircraft utilisation and was operating on mostly unprofitable routes, he said.

"We did a complete and honest analysis of the business... So we really had to admit what went wrong, and I always believe if something goes wrong, blame it on yourselves instead of others," he said.

AFP

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