Garuda Indonesia profit nosedives
Indonesian flag carrier Garuda Indonesia is the latest airline to declare: Things are tough out there. Very tough.
A weak rupiah battered Garuda’s 2013 net profit and the outlook looks bleak.
Carriers in the region such as Lion Air, AirAsia and Mandala Airlines are building their aircraft fleets with a view to expanding into each other’s markets.
"There’s so much overcapacity and there will be consolidation," Garuda’s chief executive, Emirsyah Satar, told the
Jakarta Post.
"The growth is there. But the problem is how we manage that growth in terms of both fund raising and the network."
Garuda posted a near-90% drop in net profit to US$11.2 million for the full year ended December from US$110.8 million in 2012.
Garuda is looking for strategic investors for its low-cost unit Citilink, with the ultimate aim of taking it public, Satar said.
"Looking into the future, ultimately we want Citilink to IPO. The partner that we are looking for is a partner that does not just bring in capital, but also the know-how and experience in running low-cost carriers."
Ian Jarrett
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