Garuda Indonesia Group Books Net Income of US$9.35 Million for 2016

GARUDA Indonesia and its subsidiaries maintained positive performance throughout 2016 with a net profit of US$9.36 million, or the equivalent of Rp124.5 billion (exchange rate Rp13.300 per US$), while carrying a total of 35 million passengers on both Garuda Indonesia and Citilink Indonesia.

According to President Director of Garuda Indonesia, M. Arif Wibowo said as we know, the trend in growth for the world aviation industry, especially for the Asia-Pacific region, has been under pressure for the last five years, especially as a result of the global economic slowdown that has affected the purchasing power of people, but the Garuda Indonesia Group can still maintain its positive performance.

“Referring to the performance review of the Asia Pacific aviation industry released by the passenger yield of the Asia Pacific aviation industry in the past five years has experienced a significant downward trend, from USC 9.6/km in 2012 to USC 6.2/km in 2016. However, the passenger traffic recorded showed an increasing trend from 511.6 million passengers in 2012 to 632.8 million passengers in 2016,” he said.

He also explained that the study indicates that despite showing an increase in passenger traffic in the aviation industry in the Asia Pacific region, there has actually been a decreased yield because most carriers have been participating in the expansion of their business development strategy.

"Through its long-term business strategy, Sky Beyond, the Garuda Indonesia Group was able to maintain profitability with various policies, ranging from the company's efficiency program, proportional consolidation of production capacity, to strengthening the service line and the company's operations. In addition, the company also continued to grow expansively to maintain positive margins and recorded a total consolidated revenue of US$3.86 billion," added Arif.

Arief stated that entering the competitive aviation industry in 2017, Garuda Indonesia will strengthen a number of commercial sectors and commerce by accelerating the development of service-based IT by optimizing customer loyalty programs to strengthen the device platform of e-commerce, so that the company can deliver a seamless service to all passengers.

Throughout 2016, the frequency of Garuda Indonesia flights also rose 9.89% to 274.969 from a total of 249.974 flights in 2015. The increase in flight frequency is in line with the company's efforts to expand its network in both the domestic and international market.

"2016 was a year of investment for the company, considering that we maximized the utilization of wide body aircraft for the expansion of international routes in the middle to long haul sector. In the future, we project that cycle fleet restructuring will next be carried out in 2019," said Arif.

Following the development of the cargo business, Garuda Indonesia managed to increase total cargo to 415.824 tons, an increase of 18.22% from 2015, when the total reached 351.724 tons. The overall amount of revenue in the cargo market in 2016 was recorded at US$219.15 million, an increase of 16.65% compared to the US$187.87 million booked in 2015.

"The growth in Garuda Indonesia's cargo markets was carried out by optimizing cargo space, which included maximizing the commodities that have high yields - including building synergies with other sectors of the logistics industry in maximizing the reach and service of Garuda air cargo products until reaching aspects of the door to door services. In the future, we will also increase the capacity of the cargo business through the existing routes of international flights we serve," said Arif.

Related to the situation of the aviation industry in the Asia-Pacific region which is experiencing intense competition and has affected both domestic and international flights, the position of Garuda Indonesia at this time recorded a market share of 41.71% in the domestic market and 26.93% for the market share of international markets.

Meanwhile, the Garuda Indonesia Group also managed to record an increase in scores of other income consisting of components of ancillary revenue, income sector strategic business unit (SBU), to other subsidiaries with the achievements of the sector amounted to US$392 millionl, an increase of 13.7% compared to the 2015 total of US$344.6 million.

Regarding operational performance in terms of On Time Performance (OTP) in 2016, Garuda reached 89.51%, up from 88% the previous year, which was achieved despite the challenging flight operations due to infrastructure development such as the domestic services migration to the new Terminal 3 at Soekarno-Hatta to weather factors, or force majeure. Meanwhile, the average occupancy rate throughout 2016 was 73.1% for Garuda Indonesia and 76.8% for Citilink.

In line with the ongoing network expansion program, during 2016, Garuda Indonesia opened a number of exciting new flight destinations like Medina, Mumbai, and several other domestic destinations such as Sintang, Silangit, Nabire and Maumere. By the end of 2016, Garuda Indonesia was serving flights to and from a total of 19 international destinations and 64 domestic destinations.

During 2016, the Garuda Indonesia Group also focused on additional flight capacity as part of the revitalization program development by bringing 17 aircraft fleet, which consisted of four ATR 72-600 aircraft, four A330-300s, one B777-300ER aircraft and eight A330 -200. Thus, by the end of 2016, the Garuda Indonesia Group operates 196 aircraft with an average aircraft age of 4.6 years. [photo special]