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DALLAS - The Indonesian Stock Exchange has lifted a trading suspension on shares of the country's flag carrier Garuda Indonesia (GA), prompting a slump by as much as 14.4% in the airline shares. However, GA's Chief Executive Irfan Setiaputra said lifting the suspension would now catalyse the airline's recovery.
Share trading in the SkyTeam member was suspended after GA defaulted on US$500m of Islamic bonds in 2021. A court-led restructuring program was then undertaken and completed at the end of 2022. This was helped by a capital injection of US$478m from the Indonesian government in December.
"Solid Foundation"
Now, Mr Setiaputra is bullish about the carrier's recovery. "With an increasingly solid foundation of business performance that is also supported by an increasingly lean and adaptive cost structure…we are optimistic that Garuda can maximise the momentum in reviving business performance," he said.
It plans to grow its fleet from the current 61 aircraft to at least 72 by the end of 2023, plus those operated by its low-cost carrier Citilink (QG). The airline has been renegotiating the terms of some of its aircraft leases and terminating some earlier than planned.
Expansion of Operations
Operationally the airline plans to develop its multi-hub strategy from its "strategic" hubs of Jakarta (CGK), Denpasar (DPS) and Kualanamu Medan (KNO). Charter services, especially those for religious pilgrimages, which Setiaputra describes as a "promising market," will also be an area of focus.
Meanwhile, its cargo operation will also be expanded, with Setiaputra saying it would help the carrier's growth of the national export sector. "We will strengthen this commitment by developing a cargo flight network for both charter and scheduled flights to support direct call activities to various national export destination countries."
https://airwaysmag.com/garuda-secures-government-bailout/
Featured Image: GA received its first A330-900 in November 2019. Photo: Wilbert Tana/Airways.
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