Garuda Indonesia records $84.9 million losses in first half of 2016

National flag carrier Garuda Indonesia experienced US$63.2 million (S$84.9 million) or around Rp 824 billion in losses in the first half of 2016, the company's senior official said.

Garuda Indonesia president director Arif Wibowo said in a press conference in Jakarta on Monday that in the same period of last year, the company booked a net profit of Rp 392.6 billion (S$39.3 million). The losses it suffered were triggered by tight competition in domestic flights, which led to a price war.

"What we have been facing in our domestic flights is a decline in yield, which reaches almost 10 per cent compared to the previous year," he said.

Arif further explained that although Garuda Indonesia's passenger revenue per kilometer had increased by 9.8 per cent, accompanied by a 19 per cent increase in Citilink Indonesia's passenger revenue and a 20 per cent increase in the latter's passenger capacity, all of these factors could not cover the big losses suffered by the company.

Meanwhile, Garuda's total revenue reached $1.76 billion (S$2.36 billion) in the first semester of 2016, down by 4.1 per cent from $1.84 billion (S$2.47 billion) in the same period of last year.

Arif said the ongoing global economic turmoil had also affected the company's operations. Nevertheless, he said, he was optimistic because the rupiah exchange rate had improved following the issuance of new policies from the government.

"With the government's new policies and the rupiah, which is getting stronger, there is positivity ahead. There are good prospects in the future," said Arif.

He further said Garuda strove to improve its work performance by operating nine of its 17 new aircraft and by expanding to Europe, where people could reach via Heathrow and Gatwick airports in London, the UK.