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Garuda Indonesia recovers in Q1 with US$19.7m profits despite 20% ticket price cuts

Garuda Indonesia Group posted US$19.7 million in profits in the first quarter of 2019, despite slashing its tickets by 20% in February. This is a huge leap from the US$64.3 million loss it experienced in the same period last year.

In a statement to The Jakarta Post, Garuda Indonesia finance director Fuad Rizal said the performance is driven by its efficiency programme, cost structure optimisation, as well as effective measurement and management of fuel consumption. “The Garuda Indonesia Group also had also renegotiated aircraft leasing costs, which managed to reduce aircraft leasing costs by 30% or an equivalent of US$60 million,” added Rizal to the outlet.

Scheduled flights contributed US$924.9 million in revenue, rising from the first quarter last year by 11.6%. This comes after the group responded to Indonesian president Joko Widodo’s call for airlines to lower fares in February, reducing ticket prices by 20% on all of its routes, including those of its subsidiaries. The seat load factor for Garuda Indonesia also improved from 69.7% in the first quarter of 2018 to 73.3% in the same period this year.

Meanwhile, ancillary revenue and other revenue from subsidiaries such as Citilink Indonesia, Sriwijaja Air and NAM Air saw a 27.5% jump.

Recently, Garuda Indonesia introduced a new menu featuring 21 local dishes for its domestic flights. Out of them, six are conceptualised in collaboration with local restaurant Sarimande and are side dishes to Nasi Padang (mixed rice). In a press release in February, the airline’s commercial director Pikri Ilham Kurniansyah said that the move is part of its commitment to present “the new flight experience” and introduce local delicacies to the world.

In the same month, Garuda Indonesia also launched a new economy offering named Economy Sleeping Comfort (ESCort) for long-haul flights. It has however, been met with mixed reviews from netizens.

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