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Garuda Indonesia posts 51.9% jump in net profits

National flag carrier PT Garuda Indonesia (GIAA) reports that in the first nine months of this year its total revenues grew 14

Tassia Sipahutar (The Jakarta Post)
Jakarta
Sat, October 27, 2012

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Garuda Indonesia posts 51.9% jump in net profits

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ational flag carrier PT Garuda Indonesia (GIAA) reports that in the first nine months of this year its total revenues grew 14.4 percent to US$2.39 billion and its net profits climbed 51.9 percent to $56.48 million.

The total number of passengers rose 20.2 percent to 14.89 million, while cargo surged 18.7 percent to 201,070 tons. In addition, its flight frequency increased by 17.2 percent to 111,251.

“Indonesia’s trade relations with other countries continue to grow. The government’s MP3EI [the Acceleration and Expansion of Indonesia’s Economic Development Master Plan] and the regional autonomies also played a role in our business development,” Garuda president director Emirsyah Satar said in Jakarta.

Garuda’s operating revenue was up 14.4 percent to $2.39 billion between January and September 2012. The majority came from its scheduled airline, with 89.2 percent ($2.13 billion), followed by non-scheduled airline and others, with 2.5 percent and 8.2 percent respectively.

Even though the scheduled airline dominated operating revenue, the highest growth in this period was posted by the non-scheduled airline. Revenue from the non-scheduled airline jumped to $60.5 million.

In line with a higher flight frequency, the company saw its operating expenses rise by 12.1 percent to $2.29 billion. Non-fuel expenses made up for 61.4 percent of the figure, while fuel accounted for the remaining 38.6 percent.          

Despite the positive financial performance, by the end of September 2012, Garuda’s on-time performance rate declined to 84.5 from 87.6 percent last year. Garuda operational director Novianto Heru Pratomo said the decline was caused by several factors, including airport traffic congestion and weather.

“It seems that the current airport infrastructure is insufficient to support the growth of the airline industry. There were also forest fire incidents that resulted in a series of delays,” he said.

Garuda’s standard for on-time performance rate is set at 85 percent, according to Novianto. “We will try to reach the target by the end of this year,” he added.

Garuda finance director Handrito Hardjono said the company had disbursed $400 million in investment during the nine month period this year, chiefly to support the expansion of its fleet.

Today, Garuda operates 96 aircrafts and has an average fleet age of 6.23 years. By the end of this year, it will receive an additional nine aircraft, consisting of one Airbus 330-200, four Airbus 320-200 and four Bombardier CRJ1000 NextGen. Garuda hopes, with the new aircraft, to see a 13 percent rise in capacity by the year end.

To boost business, in 2013, Garuda will receive a total of 34 new aircraft for both Garuda and its budget airline subsidiary, Citilink, according to Emirsyah.

The additions for Garuda will comprise four Boeing 777-300 ER, 10 Boeing 737-800, three Airbus 330 and seven Bombardier CRJ1000 NextGen. Meanwhile, Citilink will receive an additional 10 new Airbus 320. The new purchases will require around $2.07 billion in investment.

Garuda have also recently signed a code-share agreement with the Gulf airline Etihad Airways that will expand its international network. Through the new agreement, Garuda will have access to 28 of Etihad’s destinations, including Kuwait, Milan, Nairobi and Toronto.

According to Emirsyah, the company is currently waiting for approval from each country. Prior to the Etihad deal, Garuda had code-share agreements with 10 international airlines to 16 destinations.

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