Garuda Indonesia expects to return to profitability in 2019, owing to higher yields during the year.
The carrier last posted an operating profit of $171 million for the quarter ended 30 September. Operating revenue rose 10% year-on-year to $1.35 billion, and net profit came in at $99 million.
In comparison, its restated 2018 results reported an operating loss of $139 million for the full year, though net loss narrowed to $179 million. Revenue came in at $4.37 billion.
However, its bottom line could be eroded by an impairment cost from the loss of a management deal its low-cost subsidiary Citilink previously had with Sriwijaya Air.
Both sides could not overcome a deadlock over the appointment of a new management team and ended the partnership last November. In a series of twists and turns, Sriwijaya’s board of commissioners dismissed three senior executives seconded from Citilink in September without providing an explanation but agreed to resume the deal in October.
Going forward, Garuda Indonesia will focus on raising the yields on its international services rather than depend on a high load factor or passenger traffic.
It plans to do so through network partnerships with alliance and non-alliance partners, along with expanding its cargo business, it says at a recent event detailing the past year’s operating performance.
The carrier adds that it has extended aircraft leases from 12 years to 15 years but did not specify the aircraft type. At the same time, it is not planning for any capital expenditures in 2020, apart from the aircraft maintenance reserves.
It states that it has cancelled its order for Boeing 737 Max and is waiting for Boeing to offer an alternative type, though it does not elaborate further.
Cirium fleets data shows that the airline has 49 737 Max 8s on order and one in storage.