JAKARTA, 27 January 2006 - PT Garuda Indonesia plans to turn its Citilink service into an independent low-cost carrier, and it is considering leasing 10 Airbus A319s for the new airline, the Jakarta Post reported, citing a Garuda official. Garuda plans to spin off the Citilink business unit in the first half of this year, the newspaper quoted Joseph Saul, Garuda's vice president in charge of Citilink, as saying.

Citilink, which operates low-cost domestic flights, has five Boeing 737s at present. It carried 700,000 passengers last year, and Garuda expects the number to rise to 1 mln this year, Saul said. Citilink may co-operate with another low-cost carrier to improve its systems and management, the Jakarta Post quoted Garuda executive vice-president for finance, Alex Maneklaran, as saying.

Heavily indebted Garuda has been facing stiff competition from low-cost carriers here and in neighboring countries such as Lion Air and Malaysia's AirAsia.

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