Saturday, 19 January 2019

Garuda Still Suffers Losses Despite Changing Directors  

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  • TEMPO/Marifka Wahyu Hidayat

    TEMPO/Marifka Wahyu Hidayat

    TEMPO.CO, Jakarta - There have been reports that Pahala Nugraha Mansury will be fired from his position as president of state airline Garuda Indonesia. The authority to decide the airline's leadership is the SOE Ministry's. Today, the Ministry will join the airline's extraordinary shareholders general meeting (EGM).

    Whatever would be decided, Pahala said he is ready to accept it.

    "The moment you're assigned, you are prepared to be replaced," he said in Cengkareng on Monday, September 10.

    Garuda has had its CEO replaced several times over the past few years. Each time, the issue of financial loss is brought up.

    Read also: Garuda Indonesia Provides Extra Flights for Lombok-Denpasar Route

    This is due to the fact that the airline often posts annual losses, despite having profited as well. During Emirsyah Satar's time from 2005 to 2014, Garuda suffered losses in 2005 (US$7.2mn) and 2014 (US$338.4mn).

    Then, Arif Wibowo helmed the company from 2014 to 2017. In 2015, the airline managed to profit US$77.97mn, but in the profit fell to US$9.36mn due to airfare competition and sluggish economy. In the first quarter of 2017, Garuda lost US$283.8mn due to soaring fuel hike prices. Arif was discharged in April that year.

    Pahala Nugraha Mansury was appointed to replace him. He managed to turn back the financial situation and lowered the losses to US$213.4mn. Then, in the first half of this year, the loss was further reduced to US$114mn.

    In a press conference in July, Pahala mentioned high jet fuel prices as the main cause for Garuda Indonesia`s financial loss.