Airline News
Garuda secures Sharia financing
March 30th 2015
Indonesian flag carrier, Garuda Indonesia, last week secured $100 million in loans through a Sharia financing agreement with private lender, Bank Internasional Indonesia, a part of Malaysia’s Maybank, the Jakarta Post has reported. Read More » Garuda president, Arif Wibowo, said the loan would be used partly to refinance the airline’s maturing $300 million debt and be put toward its Quick Wins rehabilitation program. Quick Wins was designed to return the national carrier to profitability by reducing, or closing, unprofitable routes, opening new ones and cutting overheads.
Garuda’s executive team has identified China as its highest potential growth market, where it plans to launch up to ten routes this year, including Chengdu, Chengzhou, Chongqing, Ningbo, Harbin, Xian, Shenyang and Wuhan, while increasing frequency between Denpasar and Shanghai. Indonesian president, Joko Widodo, was on a state visit to Beijing last week, where he discussed bilateral trade advances between Indonesia and China with his Mainland counterpart, Xi Jinping. “With the plan to waive visa requirements, I believe the number of passengers from China can reach one million this year, which is a good contribution for the government as well,” Arif noted. Jakarta-based Garuda said it hoped to carry 80% of these projected visitors.
Garuda reported a $373 million net loss in 2014, a significant drop from the $11.2 million net profit a year earlier, as foreign exchange losses and rising costs cut into revenue. However, the carrier’s latest performance revealed a $1.2 million profit in February, on a 10.8% year-on-year passenger increase.
