Pilots and staff of national flag carrier Garuda Indonesia have canceled a planned strike, the company said on Friday (06/07). (Reuters Photo/Beawiharta)

Garuda Swings to Loss in 2017, but Is Upbeat About This Year's Prospects


FEBRUARY 27, 2018

Jakarta. National flag carrier Garuda Indonesia is optimistic about its performance this year despite last year's losses.

Garuda booked a $213.4 million loss in 2017, despite a $9.4 million profit in 2016. Its revenue, however, went up 8.1 percent to $4.2 billion, the company said in a statement on Monday (26/02).

"We expect that this year our business performance will recover. In the first quarter there may be losses, as we are entering low-season, but we expect to post a profit for the full year," Garuda Indonesia president director Pahala Mansury said, as quoted by Investor Daily.

The carrier's losses were mainly due to a 25 percent increase in its fuel expenses to $1.15 billion. It also had to spend $145.8 million to participate in the government's tax amnesty program last year, which eroded profitability.

In the fourth quarter alone, the company booked a $8.5 million profit, down 84 percent from the corresponding period a year earlier.

In a bid to improve efficiency, Garuda is renegotiating contracts with an aircraft manufacturer to lower the cost of its fleet by 25 percent.

According to the latest data, the carrier's seat-load factor — which indicates how efficiently it makes use of its seating capacity — improved to 74.7 percent from 73.1 percent in 2016.

Previously, Pahala said he is confident about a further increase in revenue and net income, as the company will open a route from London to Melbourne via Jakarta.

Garuda targets to reap $4.9 billion in revenue this year, with a modest profit about $8.9 million.

In October, the carrier announced it plans to raise Rp 2 trillion ($147 million) through a global bonds sale in June.