GIAA Delays Aircraft Delivery

GIAA Delays Aircraft Delivery

Garuda Indonesia Tbk (GIAA) is negotiating with Airbus and Boeing to delay the delivery of about 20 aircrafts by 2019. The delay is to increase the company’s fleet utilization and reduce lease costs by 20 percent.

Pahala N Mansury, President Director of GIAA, said the delay is valid for the company and its subsidiary, Citilink. “There should be ten aircrafts for Garuda in the next two years and the same amount for Citilink,” said Pahala. The company’s discussion with Airbus and Boeing is not final yet there are positive indications that this request will be approved.

By the end of 2016, GIAA has 36 big aircrafts and 108 small aircrafts while Citilink has 52 aircrafts. Currently, GIAA aircraft utilization reaches nine hours 38 minutes per day. “We will increase to 11 hours per day by 2019 for efficiency and improving the company’s performance,” said Pahala.

The company also negotiated a lease term to reduce the lease rate. Based on the financial statements as of June 2017, the company has a finance lease obligation that will mature in one year amounting to USD 22.22 million.

The company posted a net loss of USD 292.2 million, surging compared to net loss in the same period last year amounting to USD 38.39 million. Pahala said the company began to book profits in the third quarter of 2017. “The third quarter has recorded profit due to the current peak season and possibly in the fourth quarter as well. However, due to a loss in the first half of 2017, we do not know whether can record earnings at the end of this year,” said Pahala. (*)

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