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Garuda swings to operating profit during third-quarter

Double-digit revenue growth at Garuda Indonesia during the third quarter 2019 helped the airline leave behind its previous loss-making status.

A Garuda investor presentation show that the airline's operating profit grew to more than $171 million during the quarter ended 30 September, from $37.2 million profit for the same period last year.

Operating revenue rose 10.3% to $1.35 billion, led by a 19% rise in revenue from non-airline subsidiaries and strategic business units. This was followed by a 10.4% rise in revenue from charter services, and a 9% lift in scheduled services income.

Overall expenses fell 0.7% to $1.18 billion. Fuel costs declined 14%, while aircraft leasing cost and other expenses increased. Net profit, meanwhile, came in at $99 million, after a $3.7 million profit last year.

On a nine-month basis, Garuda delivered an $253 million operating profit, following a $70.8 million loss last year.

Domestic capacity as measured in ASK was reduced 20.6%. The number of passenger declined 19% to 4 million. Load factor increased 2.7 percentage points to 81.6%. Yield rose 30.7%, while average fares increased 32%.

International ASK was up 2.4%, but passenger numbers were down 4.4% to 1 million. As a result, load factor declined 2.1 percentage points to 76.7%. Nonetheless, yield grew 1.8%, and average fares grew 6.2%.

Garuda reaffirmed a target of attaining a net profit of $71 million this year, with a revenue of $5.4 billion.

Initiatives for this year span the further development of Garuda's cargo and logistics business, freighter operation, new income streams for MRO subsidiary GMF AeroAsia, and improvement of the carrier's management agreement with Sriwijaya Air.

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