Garuda Indonesia Curbs its Losses in Traditionally Slow Q1
National airline Garuda Indonesia narrowed its losses in the first quarter this year by planning ahead to cushion the blow of the slow travel season.
On Monday, the company reported that its net loss in the first quarter was reduced to $10.7 million from $19.1 million in the same quarter last year. Revenue increased 23 percent to $717 million, up from $583 million.
“The first quarter, from year to year, is always a losing quarter,” Emirsyah Satar, president director and chief executive of Garuda, said on Monday.
The company prepared for a slowdown in the early months of the year with a flurry of promotional ticket sales, which helped to keep seats occupied, Emirsyah said.
The first quarter seat load factor improved to 72.8 percent from 71.7 percent, he said. Garuda had 4.6 million passengers during the quarter, 25 percent more than a year earlier.
The number of passengers on domestic flights increased by 23 percent during the quarter, while the ranks of international passengers grew by 18 percent.
Garuda’s low-cost carrier Citilink carried 577,424 passengers in the first quarter, 55 percent more than in the same period last year, Emirsyah said.
“However, at the same time there was a fuel price increase in the first quarter,” he added, pointing to an 11 percent increase this quarter that brought fuel to 89 cents per liter and caused the company’s fuel expenses to rise 28 percent to $281 million.
Still, Emirsyah remained optimistic for the rest of the 2012.
“Last year we had even bigger losses, but we managed to have good net income. This year will be better,” Emirsyah said.
Earlier this year, the president director predicted the company would grow by 20 percent in 2012.
In 2011, the company posted a 56 percent increase in net profit to Rp 809 billion ($88.1 million), up from Rp 518 billion a year earlier. Total operating revenue grew 39 percent to Rp 27.2trillion last year, up from Rp 19.5 trillion.
Commenting on tycoon Chairul Tanjung’s recent acquisition of shares in the company, Emirsyah said it was too soon to know if it would prompt changes in the company.
Chairul, through his company Trans Airways, bought 10.3 percent of Garuda’s shares from its underwriters for Rp 1.4 trillion.
“At Garuda, whatever it is that can bring added value to the company, we will welcome it,” Emirsyah said.
Shares of Garuda fell 5.6 percent to Rp 670 on Monday, reversing much of Friday’s gain following the announcement of Chairul’s purchase. The shares are up 41 percent so far this year.