Garuda Indonesia, the country’s flag carrier, posted a loss of US$1.09 billion in the first nine months of the year and is expected to merge with other state-owned travel companies.
Travel restrictions meant the airline carried eight million passengers, down 65.6 per cent year-on-year, while revenue tumbled 67.8 per cent to US$1.1 billion. During the period ending 30 September, Garuda’s cargo and charter services contributed to nearly 40 per cent of its revenue, a massive jump from 4.6 per cent last year.
In an investor update, the airline said it continues to take steps to mitigate the effects of the pandemic, including renegotiating aircraft leases, restructuring debt, and closing unprofitable routes.
“During the crisis due to pandemic Covid-19, the government played a role in providing financial support for airlines in order to preserve their business continuity,” said Garuda in the filing.
The airline was granted a US$583 million injection in July by the Indonesian government, according to The Jakarta Post.
Last week, the Indonesian government also announced plans to merge nine state-owned travel companies, including Garuda Indonesia and low-cost subsidiary Citilink, into one holding company, according to CH-Aviation. Tourism accounts for 5 per cent of Indonesia’s GDP.
The mega-merger would enable airlines, airports, and tourism companies to increase collaboration, boost competitiveness, and reduce costs by operating under one umbrella, said Indonesia’s Ministry of State Owned Enterprises. Other companies to be integrated include Angkasa Pura, operator of Garuda hubs including Jakarta and Bali airports, and Inna Hotels and Resorts.
