Garuda Indonesia Targets Quick Wins With More Airbus A330s And Boeing 737s


  • Garuda Indonesia’s strategic actions post-restructuring led to a significant revenue increase in 2023.
  • Debt restructuring efforts have eased Garuda’s financial burden, reducing short-term liabilities by 30%.
  • The airline group is prioritizing profitability and cost efficiency, focusing on selective international services in 2024.

While the COVID-19 pandemic left no airline untouched, it is fair to say that some found the going tougher than others, particularly in Southeast Asia, where severe and extended lockdowns left airlines with gaping holes in their balance sheets. The pandemic effects were also the straw that almost the camel’s back for airlines already in difficult financial situations, such as Thai Airways and Garuda Indonesia, although both have now emerged looking a lot healthier.

Revenue and passenger numbers soar

Last week, national flag carrier Garuda Indonesia released its 2023 results, which showed a 40% Year-on-Year (YoY) increase in operating revenue to $2.9 billion and a net profit of $252 million. This is a significant drop from the $3.7 billion net profit in 2022, primarily driven by gains from restructuring the group.

Garuda Indonesia 777 landing

Photo: Nieuwland Photography I Shutterstock.

The group carried 19.98 million passengers in 2023, a 34% increase YoY, with Garuda Indonesia transporting 8.29 million and low-cost carrier Citilink 11.68 million, at passenger load factors of 72.44% and 78.7%, respectively. The group recorded a 2023 load factor of 74.88%, with Garuda Indonesia (Garuda) recording an impressive on-time performance of 87.3%.

Airbus A320neo Citilink flight - Taxiing

Photo: Airbus

Operating costs rose by 4% to $2.6 billion, with the increased flying activity pushing fuel expenses up by 27% YoY to $957 million, accounting for close to 30% of the group’s total expenses. That could have been worse, as Gauruda said fuel cost optimization helped save the group around $16.1 million in December. Garuda Indonesia’s President Director, Irfan Setiaputra said:

“The strategic corporate actions implemented to accelerate post-restructuring performance recovery, coupled with the growing passenger movements, are expected to further strengthen the business entity’s foundation for optimizing business revenue and ensuring sustainable profitability.”

To meet continued high demand, the group plans to add nine aircraft in 2024, including one deferred from last year and excludes additional aircraft leased for the annual Hajj season. The aircraft that will arrive progressively throughout the year include four single-aisle Boeing 737-800s, two widebody 777-300ERs, and two Airbus A330-200s. Some of that capacity will allow Garuda to launch flights to Doha (Qatar), and the airline said it complies with lessor requirements for new aircraft leases.

A Garuda Indonesia Boeing 737 taking off.

Photo: Boeing

Published fleet numbers are not always 100% accurate, and with Garuda Indonesia, that’s exacerbated by the aircraft moving in and out of active service. The best estimate is from the airline, which said that at the end of September 2023, it had 69 aircraft, with 58 of those in operation, including 37 Boeing 737s, eight 777s, and 13 Airbus A330s, including two A330neos. The same report showed Citilink was operating 45 aircraft, including 34 Airbus A320s, five A320neos, one A330neo and five ATR 72-600s.

Debt load is easing with the new strategy

Since late 2021, the airline group has been restructuring its debt, and that effort paid off in 2022 when it received approval from its creditors to reduce debt by up to 50%, from $10.9 billion to $4.79 billion, which has significantly helped the airline with its recovery.

A Garuda Indonesia Boeing 737 taxiing to the runway.

Photo: Markus Mainka / Shutterstock

The debt load further decreased last year, with short-term liabilities falling by 30% from $1.68 billion to $1.16 billion. Garuda has several debt repayment schemes, including converting debt to equity, paying it down from operational cash flow, issuing new debt securities and sukuk (Islamic bonds).

Garuda is implementing its ‘Rebound Forward’ operating strategy, which aims to secure three Quick Wins under Full Service, Simple, and Profitable headings.

Recognizing the power and strength of the Garuda Indonesia brand, the airline’s strategy is to be recognized as the most trusted brand that delivers genuine and enhanced service and offers a digitally enabled package to its customers. The Simple aspect means it will focus on domestic routes and selective international services and look for effective synergies with Citilink, including flight planning, fleet type optimization and integrated talent management.

In 2024, the group is prioritizing profitability, focusing on cost efficiency and restructuring among its subsidiaries. These include low-cost carrier Citilink, maintenance and repair operator GMF AeroAsia, logistics business Aerowisata, and ASYST, a provider of advanced IT solutions for the transportation and travel industries.

Have you flown with Garuda or Citilink recently? Let us know in the comments.

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