What’s Garuda Indonesia Does to Turn The Loss Into a Profit in 2018?

Indonesia’s national flag carrier Garuda Indonesia is optimistic that it will see net profit in 2018. Actually last year the airline’s net loss reached USD $213.4 million, dropping dramatically from a net profit of USD $9.4 million in the preceding year.

During 2017 Garuda Indonesia’s sales rose 8.1 percent year-on-year (y/y) to USD $4.17 billion. Most of the company’s sales – USD $3.4 billion or approximately equivalent to 81 percent of its total sales – originate from scheduled flights.

Sales are growing but the company’s operating expenses during the year rose to a 25 by increasing in fuel costs to USD $1.25 billion, while other expenses rose 11.3 percent (y/y) to USD $2.03 billion. President Director of Garuda Indonesia, Pahala Mansury added that other matters put pressure on the company’s balance sheets were the tax amnesty program. US$7.5 million fine that had to be paid to Australia after Garuda Indonesia was found to have participated in a cartel to fix the prices of cargo flights.

However, Garuda Indonesia is optimistic that 2018 will become a much better year in terms of corporate earnings. The company targets sales to rise 17.5 percent (y/y) to USD $4.9 billion and record a net profit of USD $8.7 million. The company applies five strategies to realize these targets. Firstly, by optimizing cost efficiency for flights. Secondly, by renegotiating existing contracts. Thirdly, by improving the utilization of its fleet. Fourthly, by boosting the quality of its service (including the use of jet bridges). And lastly, by safeguarding stable tariffs.

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