Garuda sees brighter skies after 2011 financial results
Publicly listed flag carrier PT Garuda Indonesia (GIAA) expects to add to its fleet and flights this year to help the company further boost its revenue growth after last year’s strong performance.
Garuda saw a 39.06 percent increase in revenue to Rp 27.16 trillion (US$2.96 billion) and its operating income surge to Rp 1.01 trillion, thanks to more cost-efficient new planes, after suffering Rp 67.16 billion in operating loss in 2010.
The new planes helped boost Garuda’s net profit by 56 percent to Rp 805.53 billion in 2011, the company announced on Wednesday.
“We carried out massive investment in 2010. Now, we are enjoying the returns,” Garuda president director Emirsyah Satar said. “For this year, we hope that our revenue will increase 20 percent from last year.”
Garuda’s shares soared 3.23 percent to Rp 640 following the 2011 earnings announcement, the highest close since they began trading in February 2011.
Emirsyah said the operation of new planes — which consumed less fuel and resulted in lower maintenance and operating costs — helped the company offset the impact of soaring fuel costs.
Garuda’s expenditure for fuel rose 57 percent last year, pushing up operating expenses by 33.42 percent to Rp 26 trillion.
Garuda added 15 new planes to its fleet last year and phased out 16, leaving 87 operating aircraft in its fleet. It plans to phase in 22 new planes this year, 11 of which are earmarked for its low-cost unit, Citilink.
After phasing out other aged aircraft, Garuda will have 85 aircraft by year-end, while Citilink will own 20.
These planes, Emirsyah said, would help Garuda perform better this year, including in the first quarter, when, in the same period last year, the airline suffered a net loss of Rp 183.41 billion.
The nation’s flag carrier flew 17 million passengers in 2011 and Emirsyah targets the number to increase by 29.41 percent to 22 million passengers this year.
“The growth in passengers is in line with the growth of the economy. We are now seeing that the economy of Asia Pacific countries, particularly China, India and Indonesia, is growing,” Emirsyah said.
To meet the growing number of passengers, Garuda intends to open more hubs this year in Medan and Balikpapan to connect various main cities in the country, in addition to the current Jakarta, Denpasar and Makassar hubs.
It will also open a new route connecting Bandung and Surabaya this year, Emirsyah said.
For international flights, the company is planning to open direct flights to Taipei in May and to Haneda, Tokyo, in April.
Garuda finance director Elisa Lumbantoruan said the company might also fly Citilink to other countries, such as Singapore and Kuala Lumpur, so that the airline could compete in the low-cost market of international flights.
“We’ll probably deploy Citilink for international flights in the fourth quarter of the year,” Elisa added.
Citilink, which carried 1.6 million passengers in 2011, will likely increase ticket prices to anticipate a rise in the aviation turbine fuel (avtur) price, he said, adding that the increase would not affect Citilink’s grip on the country’s low-cost carrier market because Indonesia’s airline penetration remained low.