Cargo Delivery To Overseas Such As China Becomes Garuda Indonesia's Mainstay In Earning Revenue

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - The national airline PT Garuda Indonesia (Persero) Tbk is being hit by a huge debt problem. This condition is exacerbated by the sluggish aviation business due to the COVID-19 pandemic and restrictions on community activities. To be able to survive in these difficult times, Garuda Indonesia relies on the cargo business.

President Director of PT Garuda Indonesia Irfan Setiaputra said his party would focus on working on revenue from the cargo business. According to him, Garuda's cargo business continues to show improvement.

"We will be very focused on cargo and the prospects are very good, we are constantly witnessing an increase in the number of cargoes per flight," he said in a post-AGM video conference, Friday, August 13.

Moreover, said Irfan, international flights with several destination countries are actually filled with more cargo than passenger flights. In fact, on average, Garuda's large planes flying overseas are filled with more than 25 tons of cargo per flight.

"Alhamdulillah, some of our international flights, whether to China or other countries, are currently filled with quite a lot of cargo with phenomenal quantities," he said.

Irfan said that his party continues to monitor the development of Garuda's routes from time to time. The goal is to ensure that the route being flown has an advantage.

"I personally want to make sure that all the routes that we fly are profitable routes that will be based on current cargo because of course, we can't expect the maximum passenger load," he explained.

Previously, Irfan said that his company consistently managed to record increasingly promising growth in cargo transportation. Until May 2021, Garuda Indonesia Group managed to record cargo transportation growth of up to 35 percent compared to the same period in 2020.

Furthermore, said Irfan, this consistency is in line with the performance of the cargo business at the end of 2020 where the company managed to record air cargo traffic which touched the level of 99 percent of cargo transportation performance in the period before the pandemic.

"With this positive growth trend, Garuda Indonesia will continue to optimize fleet utilization for the expansion of its cargo flight network to support direct call activities for leading export commodities and MSMEs from various parts of Indonesia. One of them is through the operation of two passenger freighter fleets which now serve a number of domestic and international cargo flights. international," he said in his official statement, Friday, July 16.

It is undeniable, said Irfan, that the pandemic situation has prompted shifting behavior in the aviation industry's business trends, where the cargo business line is now one of the main pillars of Garuda Indonesia's business income, amid the decline in passenger transport traffic due to the pandemic that has been going on since last year.

"Through the submission of financial statements for the 2020 financial year, Garuda Indonesia recorded operating revenues of 1.4 billion dollars, supported by scheduled flight revenues of 1.2 billion dollars, non-scheduled flight revenues of 77 million dollars, and other revenue lines of 214 million dollars," he said.

Furthermore, Garuda Indonesia also recorded a decrease in flight operating expenses by 35.13 percent to 1.6 billion dollars compared to last year's 2.5 billion dollars.

Irfan said that this was also supported by strategic cost efficiency measures, one of which was through renegotiation of aircraft leases and other supporting operational cost efficiency which is currently being optimized by the Company.

"Through these efforts, currently Garuda Indonesia has succeeded in saving operational costs of up to 15 million dollars per month," he said.