Garuda Indonesia Posts Strong Net Income Growth in Q3
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“This positive result was achieved through non-stop hard work in implementing the ‘Sky Beyond’ business expansion strategy, which played an essential role in promoting the company’s performance the quarter,” said M. Arif Wibowo, President & CEO of Garuda Indonesia, at the media conference after the regular analyst meeting, in Garuda Indonesia’s headquarters in Jakarta.
He added that despite the highly competitive season in the aviation industry, including the global economic deceleration which affected the national economic situation, Garuda is quite optimistic of maintaining the positive growth of the company up to the end of this year.
Arif explained that since the beginning of year 2015, Garuda Indonesia had been constantly implementing the proportional financial efficiency program. The predicted loss in the first semester of 2016 was projected to turn around in the next quarter by improving the whole performance during the peak season.
The continuous financial efficiency program and the performance improvement in other aspects such as operational, services and commercial, are believed to have strengthened the company to achieve positive growth until 2020.
Arif, accompanied by the entire Board of Directors of Garuda Indonesia and the president directors of the subsidiaries, also explained that the company had succeeded in increasing total revenue from US$2.845 billion in Q3 2015 to US$2.865 billion during the same period of 2016.
Up to the third quarter of 2016, Garuda Indonesia Group (including Citilink) carried 26,043,138 passengers, which was an increase of 6.1 percent from the 24,551,594 passengers carried in the same period in 2015.
From the total amount, Garuda Indonesia carried 17.81 million passengers (comprising 14.55 million domestic passengers and 3.26 million international passengers). Meanwhile, its subsidiary, Citilink Indonesia, transported 8.23 million passengers between January – September 2016, which was an increase of nearly 20 percent from the 6.86 million passengers carried over the same period in 2015.
“Arif explained that since the beginning of year 2015, Garuda Indonesia had been constantly implementing the proportional financial efficiency program.”
As a result of the cargo-focused strategy that commenced in early 2016 to strengthen the company’s cargo business in addition to passenger business, mainly by a new Director of Cargo who had only been serving for less than six months (a new tenure on the Board of Directors since April 2016), the amount of cargo transported in January – September period was 295,217 tons, or an increase of 14.7 percent from the same period in 2015 of 257,304 tons.
Garuda Indonesia and Citilink’s flight frequency in the domestic and international sectors during the January – September period rose to 204,182 flights, with an increase of 9.7 percent from the same period in 2015 with 186,052 flights. In addition, Availability Seat Kilometer/ASK increased by 13.3 percent to 43.91 billion from 38.75 billion ASK in the same period of 2015.
Despite the challenging situation in operational aspects such as the domestic flights operations at the new Terminal 3 Soekarno-Hatta in early August, and the force majeur by unpredictable weather, Garuda Indonesia also suceeded in increasing its on time performance / OTP to 90.1 percent in the January – September period, from 88.2 percent in same period last year. The seat load factor / SLF of the period was 73.4 percent, with an aircraft utilization amount of 09:12 hours.
In line with the continuous network expansion plan, in the third quarter of 2016, Garuda Indonesia started to serve new destinations in east Indonesia, namely Nabire, which was served directly from Biak, Papua, and Maumere, which served directly from Denpasar, Bali. The opening of these new routes was a strategic step to improve the connectivity between cities in Indonesia, as well as to strengthen its network in the domestic market.
Concerning the highly competitive situation in the aviation industry – mainly in the Asia Pacific region – which influenced both domestic and international networks, Garuda Indonesia’s market share for domestic reached 41.2 percent, and 26.7 percent for international market share.
“We still have time to maximize the power and potency of our strategy, particularly in facing this coming end of year peak season period. We believe that we can reach the continuous positive growth in the coming years, including our strategic plan for international network expansion in the near future,” Arif added.
Garuda Indonesia Group operates a total of 194 aircraft, consisting of ten (10) Boeing 777-300ER, twenty-five (25) Airbus A330-200/300, two (2) Boeing 747-400, seventy-six (76) Boeing 737-800NG, eighteen (18) Bombardier CRJ1000 NextGen, and fifteen (15) ATR72-600, with a 146 aircraft operated by Garuda Indonesia, and forty (40) Airbus A320 and eight (8) Boeing 737-300/500, or 48 aircraft operated by Citilink, with an average aircraft age of 4.6 years.
Questions & Answers
Q.What is the primary strategy Garuda Indonesia attributes its Q3 net income growth to?
What is the primary strategy Garuda Indonesia attributes its Q3 net income growth to?
The company’s net income growth in Q3 resulted from the initial implementation of the ‘Sky Beyond’ strategy. This strategy focuses on Return Maximization and continuous proportional financial efficiency.
Q.How did total revenue change for Garuda Indonesia between Q3 2015 and Q3 2016?
How did total revenue change for Garuda Indonesia between Q3 2015 and Q3 2016?
Total revenue for Garuda Indonesia increased from US$2.845 billion in Q3 2015 to US$2.865 billion during the same period in 2016. This represents a modest increase year-on-year.
Q.What was the total number of passengers carried by the Garuda Indonesia Group, including Citilink, up to Q3 2016?
What was the total number of passengers carried by the Garuda Indonesia Group, including Citilink, up to Q3 2016?
The Garuda Indonesia Group, including Citilink, transported 26,043,138 passengers up to the third quarter of 2016. This figure shows an increase from the 24,551,594 passengers carried in the same period of 2015.
Q.What was Garuda Indonesia’s domestic and international market share mentioned in the article?
What was Garuda Indonesia’s domestic and international market share mentioned in the article?
Garuda Indonesia's market share for domestic flights reached 41.2 percent. For the international market, the company held a 26.7 percent share, despite high competition in the aviation industry.
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