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Garuda Indonesia bears brunt of huge losses
Publication Date : 23-07-2014
Indonesian flag carrier PT Garuda Indonesia’s net loss skyrocketed to US$211.7 million in the first half of the year due to a jump in operational costs and flat revenue.
This year’s first-half net loss was 19 times the $10.92-million net loss it booked in the same period a year earlier.
The company said in its financial statement that operational costs saw the highest increase with a hike of 15 percent, to $1.96 billion in the first semester from $1.7 billion year-on-year, kontan.co.id reported on Tuesday.
Its revenue stayed relatively flat at $1.74 billion in the first six months of the year, a thin increase from $1.73 billion from the same period last year.
The company also blamed its net loss on inflating foreign exchange, with losses amounting to $12.86 million.
Garuda is exposed to aviation turbine fuel price volatility, foreign exchange losses and interest rates, but it said it tried to hedge its fuel transactions to avoid great losses from fuel price volatility.
“We also tried to consume fuel efficiently,” Garuda president director Emirsyah Satar said in the financial report.
Fuel cost accounts for around 30 to 40 per cent of the company’s average operational costs.