Citilink will now inherit two Airbus A330-900neo aircraft which were designed for the bankrupt WOW Air. One of the aircraft arrived yesterday at Toulouse Airport adorned with the WOW livery, but it will begin flying with Citilink shortly.
The A330neo will help develop Citilink’s strategy
According to FlightRadar24, on 16th November one of Citilink’s A330-900neo aircraft arrived in Toulouse ahead of plans to fly with the Indonesian low-cost airline. The airline will receive two aircraft from the former WOW Air, the final one of which will be delivered next month. The aircraft were on order for WOW before it fell into administration.
Citilink will receive both aircraft fitted with the WOW Air configuration. Whilst some speculate that the livery will be removed once in Jakarta, the aircraft will keep the defunct WOW Air cabin setup. The airplanes will have 365 seats over two classes, split into 323 economy and 42 premium economy seats.
These aircraft open up new firsts for the airline. Citilink has acquired the aircraft as part of a strategy au courant where it will expand outside of Southeast Asia. Back in July, the CEO of Citilink spoke to Aerotime Hub about the new routes. Juliandra Nurtjahjo said:
“Frankfurt and Jeddah are potential destinations that will be developed. We will introduce the inaugural flights in October and December.”
The airline will use its first A330-900neo to start operations in Frankfurt but there are no schedules for these flights on the airline’s website just yet. The service was expected to begin in October 2019, according to Aeronautics Online.
Citilink’s long haul strategy
Citilink, or rather Garuda, is intent on emerging into the long-haul low-cost market. But why? The airline hopes that the move will help synchronize Citilink within Garuda’s long-term business strategy.
Yet whilst Citilink and its parent Garuda have chosen Frankfurt in the hope of connecting its customers to the third-largest hub in Europe, there has also been a discussion about the expected success.
Some suggest that the market for Indonesian travelers wanting to visit Germany is rather small. Immediately that raises questions as to how profitable the route will be. Not only might the appetite not be there, but the market is already saturated with cheap Southeast Asia to Europe routes. LCCs flying to these regions include Jetstar Asia, Scoot, Norwegian and Indonesia AirAsia.
But another issue for entering this market at the present moment actually devolves from the aircraft. That’s because Citilink’s new A330neo is payload restricted. Citilink, therefore, won’t be able to sell all 365 seats on board, even if it can fill them, until a higher gross weight model is available.
Despite these issues, Citilink remains optimistic about the potential of this route to Frankfurt. And besides this, its long-haul strategy is not completely expendable since Citilink also says it will be flying to Jeddah. This is a route almost guaranteed to win the public vote. What with religious tourism between the two largest Muslim populations, Citilink is bound to turn a profit.
Low-cost long-haul success is not a guarantee
But whilst Citilink enters the intercontinental low-cost market, some airlines are exiting it. Despite being an emerging market with ample consumer demand, striking the balance as a business model is quite challenging.
Recently Eurowings decided to scrap its long haul service in favor of short-haul European destinations. For the airline, these routes offer more monetary value allowing it to cut costs and operate consistently on already profitable routes. And, of course, cheap fares on transatlantic routes are what cost WOW Air its entire business.
The issue is mainly the ability to make money. Often LCCs operate at a loss and rely on add-ons to make their money. That and the fact that they can return to their base within the same day to avoid compensating staff for accommodation. But the costs don’t always match up on long-haul routes, particularly if the demand for seats is not there.
Additionally, the type of service offered on low-cost long-haul flights is different to that on regular long-haul services. In being low cost, airlines do away with the premium flying luxuries meaning that they also lose out on that market as well. It means a lot of passengers flying low-cost long-haul will be looking to save a buck.
But then maybe Citilink is not like other LCCs. Maybe it can become a solid competitor in this area. For that, we’ll have to wait and see once it begins its European low-cost operation.
Do you think the low-cost long-haul market is a good investment for Citilink? Let us know in the comments!