Tycoon to capture Indonesia's airline market

Sometimes downturns can inadvertently create opportunities for new entrants. And it seems one of Indonesia's wealthiest businessmen, Hary Tanoesoedibjo, sees the downturn in Garuda Indonesia's fortunes as an opportunity to enter the Indonesian airline market and grab Garuda's hold over the higher margin business traffic.
Tanoesoedibjo's investment company Bhakti Investama already owns 50% of Indonesia's Adam Air and controls Indonesia Air Transport, a small but profitable charter operator that plans to branch into scheduled passenger operations by operating on small regional routes.
What is more interesting is Tanoesoedibjo's move to establish mainline carrier Star Eagle.
Star Eagle will be positioned as a full service carrier and plans to launch later this year using Bombardier CRJ900s and Boeing 737-800s.
This new carrier will target less price conscious consumers and operate on larger routes within Indonesia as well as from Indonesia to destinations in Asia.
It will be positioned differently to Adam Air, which markets itself as a 'boutique airline' but is perceived as a low-cost carrier.
Having three distinct airline brands targeted at different market segments means in future Bhakti Investama has the potential to be the lead player in Indonesia's airline market.
And Bhakti Investama, unlike other would-be entrants, has the money to achieve its goals.
Tanoesoedibjo is the 15th wealthiest business person in Indonesia according to Forbes magazines' 2007 survey which puts his wealth at $815 million.
Bhakti Investama, the company he founded, owns local TV and radio networks, a national newspaper, road tolls, real estate and other assets.
Garuda, meanwhile, is hundreds of millions of dollars in debt.