Garuda Indonesia plans to only use Indonesian pilots in the future, following a strike by workers in July over the large pay disparity between local and foreign workers at the company.
The airline also announced that it would bring the salaries of local pilots in line with the average salary for pilots in Southeast Asia and allow them to retire at 56 instead of 60 years old, a key demand of the workers.
“A meeting between the company’s management and the Garuda Pilot Association concluded three things, among them that the company agreed not to employ foreign pilots anymore. The company will not extend contract of foreign pilots,” said Elisa Lumbantoruan, Garuda’s finance director.
“While there are no changes in the career system, we will adjust the benefits at each level compared with other regional airlines,” he said.
“Pilots can opt to retire at the age of 56 and enjoy pension benefits, or 60 with even better benefits,” he said without providing further details.
In July, about 650 local pilots from the Garuda Pilots Union (APG) launched a 24-hour strike over wage inequality between Indonesian and foreign pilots.
According to the APG, foreign pilots earn $7,200 a month, including housing benefits, compared to $5,000 for Indonesians.
The strike caused some delayed flights and three cancellations, but the strike was called off when then State Enterprises Minister Mustafa Abubakar intervened and convinced the union to resume negotiations with the airline’s management.
In August, 23 new cadet pilots were hired to replace the 34 foreign pilots whose one-year contracts come to an end at the end of the year.
In 2010, Garuda hired the foreign pilots on fixed-term contracts to make up for being severely understaffed following a massive expansion at the airline. It bought 24 new planes but did not have enough local pilots to fly them.
Garuda has 897 permanent pilots and is looking to hire another 200 entry-level pilots.
The strike had no effect on Garuda’s third quarter performance and with the problem solved, Garuda president director Emirsyah Satar said the airline was set to post strong growth for the rest of the year.
Garuda posted a 40 percent increase in revenue to Rp 6.9 trillion ($787 million) between July and September.
Garuda’s net profit in the third quarter alone was Rp 474 billion, a major turnaround from 2010, when the company made a net loss of Rp 128 billion in the same period.
“Our expansion is starting to pay off. Traffic is increasing and the fuel price is decreasing. Looking ahead, with new fleets, we can increase fuel efficiency,” Emirsyah said.
Emirsyah said that in the third quarter Garuda flew 4.5 million passengers, 29 percent more than the same period last year.
“Garuda’s domestic market share increased to 31 percent from 26 percent, but its international market share dropped slightly to 23 percent from 24 percent because we did not add more international flights,” he said.
Emirsyah said that he was expecting a stronger fourth quarter due to the increased capacity the new planes offer, decreasing fuel prices, and increased travel due to the hajj pilgrimage.
“We just received a Boeing 737-800NG in October. And in November we will be expecting an Airbus 330-200 that will make our Shanghai route a daily route. And in December, we will be having three new Boeing 737-800NG to replace our classic airplanes,” he added.
The airline is looking to buy 65 new planes and has said it will try to have an average aircraft age of five years to boost safety and efficiency.
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