Jakarta. Higher fuel costs tipped state-controlled airline Garuda Indonesia into a first-quarter net loss of $98.5 million, its chief executive said on Friday (28/04).

Garuda, which this month appointed former banker Pahala Mansury as chief executive to revive its fortunes, had reported a net profit of $1.02 million in the same period last year.

Apart from greater fuel expenses, the airline also faced tough competition, Pahala said.

"Our passenger yield declined even though we carried more passengers," he told reporters.

Garuda would now focus on "putting a lid on fuel costs" through hedging and optimizing its fleet and routes, he added.

Garuda's competitors include regional airlines such as Malaysia's AirAsia and Singapore Airlines, as well as private Indonesian carrier Lion Air.

The Indonesian government owned 60.5 percent of Garuda as of the end of 2016, Thomson Reuters data showed.

The appointment of Pahala was expected to boost Garuda's credibility among creditors, a senior official at the Ministry of State Enterprises had earlier said.

Pahala previously oversaw finance and treasury at Indonesia's biggest bank by assets, Bank Mandiri , which is also state-controlled.

Garuda shares closed 1.1 percent lower on Friday, underperforming the broader Jakarta Stock Exchange, which was down 0.4 percent.

Reuters