P

ublicly listed national flag carrier Garuda Indonesia has reversed last year'€™s massive losses to make a profit in the first quarter of this year, thanks to rising revenues and a drop in fuel expenses.

The state-owned company booked US$11.4 million in net profit in the January-March period this year, a stark contrast from a $168.04 million net loss in the same period last year, according to its unaudited financial report filed with the Indonesia Stock Exchange (IDX).

Garuda president director Arif Wibowo said on Monday that the firm managed to book a profit during the first quarter of this year, particularly due to an increase in passengers both on domestic and international routes.

'€œWe decided to optimize and reposition our aircraft and focus on developing our network in China and the Middle East. The adjustments have successfully increased our international passenger traffic by 17 percent, even though we only increased the capacity by 1 percent,'€ Arif said on Monday.

Garuda'€™s increase in international passenger traffic contradicted the overall weakness of international travel by Indonesians as the number of passengers traveling to international destinations dropped 3.54 percent to 3.2 million in the first quarter of this year from the same period last year, Central Statistics Agency (BPS) data showed.

Meanwhile, Garuda'€™s 13 percent increase in domestic passenger traffic was in line with the overall industry growth during the first three months of this year.

The carrier was back in the black after recording $373 million in net losses last year, making it the second least profitable airline in Southeast Asia, as its revenue grew 13.4 percent to $927.33 million year-on-year in the first quarter from $817.41 million.

Revenue from chartered flights skyrocketed by more than 13 times year-on-year to $39.2 million from only $2.86 million.

Since early this year, the airline has offered regular chartered flights connecting Denpasar (Bali) and Manado (North Sulawesi) with several cities in China including Chengdu, Chong Qin, Ningbo, Kunming, Jinan, Harbin, Xian, Shenyang and Chengzhou.

Apart from China, the firm is also expanding its charter flight network in the Middle East, encouraged by the country'€™s large umrah (minor haj pilgrimage) market.

'€œOffering regular charter flights to China and Jeddah was one of our ways to deal with the crisis early this year, during the low season,'€ Arif said. '€œWe also signed cross-currency swap agreements, and cut other expenses without reducing our level of services, which was proven effective in improving our performance during the first quarter.'€

The net profit was also the result of declining operational expenses, mainly due to a fuel expenses drop.

Garuda revealed in the report that its fuel expenses dropped almost 30 percent to $264.25 million during the first three months of this year from $376.49 million during the same period last year.

Aviation fuel prices from state-owned oil and gas company PT Pertamina dropped by 7 to 8 percent on average in the beginning of this year compared to late last year, in line with a significant drop in global oil prices.

During the second quarter of this year, Garuda will start to add to its fleet with three Boeing B777s, two Airbus A330s, seven Boeing B738s, two Bombardier CRKs and three ATR 72s. With the new additional aircraft, the carrier will operate a total of 150 aircraft this year.

'€œWe will welcome five wide-body aircraft, Boeing 777s and Airbus A330s starting from the second quarter until the end of this year,'€ Arif said.