News
Garuda Indonesia’s interim losses balloon
August 4th 2017
New Garuda Indonesia boss, Pahala Mansury, has signed up for a tough job in turning around the embattled flag carrier. And his job has just gotten a whole lot worse when the carrier posted an attributable first-half net loss of US$282 million, widened from US$63.6 million in the year-ago period. Read More »
The SkyTeam member increased revenue to 30 June by 7%, to US$1.89 billion, but this was outpaced by a 16.7% increase in operating expenses to US$2.1 billion; particularly higher costs for flight operations due to currency fluctuations, MRO and marketing.
Garuda’s cash reserves have dipped below the US$500 million mark. It put the carrier in default with investors and creditors because it had guaranteed them that consolidated total equity should not fall below US$500 million. The airline said it is seeking to amend the terms and conditions of its loan facilities.
Orient Aviation understands that as early as March Garuda approached Airbus and Boeing to negotiate potential aircraft order cancellations and deferrals. The carrier has not converted its Letters of Intent for A350 and B787 purchases.
In more bad news for the carrier, one of its B777s, performing the inaugural Halim-Jeddah hajj flight of the season, ripped a gaping hole into the runway at Halim Airport. The local authorities cancelled all 159 planned hajj flights from Halim this season and transferred them back to congested Soekarno-Hatta that was a massive logistical challenge for the airline. Garuda is planning to operate three B747-400s, five B777-300ERs and six A330-300s on hajj flights this season.
