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Garuda aims to garner 24 percent revenue hike
Cheaper fuel: A worker refuels a Garuda Indonesia plane with Pertaminaâs avtur at Soekarno-Hatta International Airport in Tangerang, on Friday
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Cheaper fuel: A worker refuels a Garuda Indonesia plane with Pertaminaâs avtur at Soekarno-Hatta International Airport in Tangerang, on Friday. Garuda has welcomed Pertaminaâs plan to lower avtur fuel by Rp 143 (1.02 US cents) per liter on average nationwide from Jan. 15 to Jan. 31. (JP/Ricky Yudhistira) (1.02 US cents) per liter on average nationwide from Jan. 15 to Jan. 31. (JP/Ricky Yudhistira)
Cheaper fuel: A worker refuels a Garuda Indonesia plane with Pertamina's avtur at Soekarno-Hatta International Airport in Tangerang, on Friday. Garuda has welcomed Pertamina's plan to lower avtur fuel by Rp 143 (1.02 US cents) per liter on average nationwide from Jan. 15 to Jan. 31. (JP/Ricky Yudhistira)
National flag carrier Garuda Indonesia is expecting a revenue increase of 24 percent this year amid expectations of an improving economy.
Garuda financial director IGN Askhara Danadiputra said that many factors would support hitting the target, including the country's gross domestic product (GDP), which was expected to fare better than last year.
'The additional fleets and routes would also support the target,' he said, while adding that the final figures for last year's revenues were still being audited.
Garuda has aimed to add 15 aircraft to its fleet this year through a leasing scheme, according to Askhara.
The new aircraft were also intended to aid the expansion of routes in this year's changing strategy.
Garuda president director Arif Wibowo stated that it would shift gears for international expansion starting this year with its 'Sky Beyond' strategy.
After recording US$373 million in net losses in 2014, the carrier managed to get back in the black thanks partly to lower operating expenses and strong growth of passenger numbers. The company's latest data showed that it booked $50.13 million in net profits in the first nine months of the year, compared to $222.30 million in losses in the corresponding period.
In the first half of 2015, Garuda managed to reverse last year's net loss amounting to $203 million to $27.7 million in net income.
Arif said that with the new aim, the company would not only focus on domestic routes, but also on medium- and long-haul routes.
He stated that it would strengthen the company's grip in the ASEAN market by adding more passenger capacity on each flight.
'For example, for the Singapore route, we will increase the use of wide body aircraft from 30 percent to 60 percent of the total flights. We will add [more flights] for Beijing to Denpasar and to Hong Kong,' he said.
The airline has also been reported to have secured a slot to fly to Heathrow Airport in London, UK, this year.
Arif also previously said the company's passenger growth this year would be at about 10 percent, a conservative number compared to the expected 20 percent passenger growth last year.
Data from the company revealed that Garuda transported about 17.69 million passengers in the first nine months of last year, a 13.62 percent increase year-on-year (yoy) from 2014. Of that number, 3.18 million passengers traveled on international routes, a 9.7 percent yoy increase.
However, Askhara said that the company was still anticipating a fluctuating rupiah, as it was deemed negatively correlated with the current decreasing aviation fuel price.
'We set the expectation for the rupiah at Rp 15,000 [per US dollar] in 2016. We will continue our hedging at $200 million per month,' he said.
The company was also still monitoring the market conditions for its plan to issue global bonds this year for its needed financing of $500 million.
The company's capital expenditure (capex) was set at $160 million this year, higher than the $130 million last year, which would mostly be used for IT and maintenance, according to Askhara.
The company has also teamed up with a fellow state enterprise, oil and gas firm Pertamina, for the use of liquefied gas for vehicles (LGV) for the airline's air crew on Friday.
Arif said that the use of the LGV would save Rp 100 billion ($7.15 million) in operational costs, hence increasing the company's competitiveness in the ongoing ASEAN Open Sky.
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