Jakarta. National flag carrier Garuda Indonesia (GIAA) is adding aircraft despite weaker passenger traffic, while its faster-growing low-cost subsidiary Citilink is shrinking its fleet ahead of a potential Pelita Air integration.

Garuda is scheduled to receive six aircraft in 2026 -- four Boeing 737-800s in the second quarter and two Boeing 737-8s by year-end -- following a Rp23.6 trillion ($1.32 billion) capital injection from Danantara in late 2025.

However, the additions will only lift Garuda’s fleet to 79 aircraft by year-end from 78 as of March. The airline will return one Airbus A330-200 to its lessor and retire four A330-300s during the year.

The fleet changes will shift Garuda further toward narrow-body aircraft, with its B737-800 fleet rising to 49 from 45, while A330-300s decline to 12 from 16.

The move comes despite weaker operating indicators. Garuda’s passenger numbers fell 4.89% in the first quarter of 2026, while its seat load factor declined 1.17 percentage points. Flight frequency also fell 1.87% to 17,901.

Aviation analyst Gatot Rahardjo said the narrow-body focus was reasonable given rising demand for domestic and short-haul international routes, particularly within ASEAN. “So, Garuda’s market remains open,” Gatot said on Tuesday.

Citilink, meanwhile, posted stronger growth. Its passenger numbers rose 19% to 2.95 million in the first quarter, while its seat load factor increased to 79.88% from 77.22%. Flight frequency also climbed 13.59% to 20,774.

Yet Citilink will receive no new aircraft this year. It will return one A320-200 and retire six aircraft, reducing its fleet to 57 from 64.

Gatot said the two airlines serve different markets, with Garuda focused more on business and upper-middle-income travelers, while Citilink competes in the price-sensitive low-cost carrier segment.

“Garuda and Citilink serve different markets and do not replace each other,” he said.

He said Citilink’s fleet expansion could become more important if Pelita Air joins the Garuda Indonesia Group and Citilink expands into international routes. But high operating costs, particularly fuel prices and the US dollar exchange rate, could be prompting management to wait.

“Perhaps Citilink’s management is waiting and seeing,” Gatot said. “Operating costs remain high, while ticket prices are lower and competition is intense.”

Garuda Indonesia shares soared 5.56% in mid-morning trading on Tuesday.

Muhammad Wafi, head of research at KISI Sekuritas, said Garuda’s prioritization could be linked to the potential Pelita Air integration and a broader restructuring of the group’s airline brands.

“If the scenario of Pelita joining the holding takes place, the restructuring of the brand portfolio will require strategic clarity on which segment each airline should focus on,” Wafi said. “Prioritizing Garuda could be part of a larger restructuring process, with Citilink’s role being redefined after Pelita enters.”

Wafi warned that the group still needs to capture the growing LCC market.

“Otherwise, the group’s total market share risks stagnating even if its unit margins improve,” he said. “This is a potentially significant strategic decision, but it will only succeed if executed properly.”

Add as a preferred source on Google +