Garuda Expects Better Performance in Second Semester of 2014

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  • TEMPO.CO, Jakarta - State-owned airline Garuda Indonesia, hoped that their fiscal performance will improve in the second semester of 2014. Garuda Indonesia spokesperson Pujobroto, said that the airline expects to have better business performance in the second semester as the Hajj season and year-end holidays begin.

    Pujo said that the losses suffered by the airline during the first semester were not caused by performance issues but because of global economic issues, which not only affect Garuda, but also other airlines around the world. The depreciation of Rupiah's exchange rate towards US Dollar was also considered to be a contributing factor. "Every time [Rupiah weakens] by 100 points against US Dollar, operational costs increased by US$12.8 million," he said.

    Pujo added that increasing price jet fuel poses yet another problem as the airline requires 1.8 million kiloliters of jet fuel each year. In the first semester of 2014, the airline recorded that the amount of fund spent on jet fuel constitutes 40 percent of the total production costs, considerably higher compared to the previous 25 percent.

    In order to improve its performance, Pujo said that Garuda has taken a number of measures such as maximizing Garuda's membership in the global alliance of SkyTeam, strengthening both domestic and international routes, shutting down unpopular routes, and accelerating the phase-out process of old aircrafts.