Pursue Profit, This Is Advice From Observers For Garuda Indonesia Airlines

Illustration (Photo: Doc. Antara)

JAKARTA - The state-owned airline PT Garuda Indonesia Tbk recorded a net loss of 4.16 billion US dollars or around Rp. 62 trillion throughout 2021.

Arista Indonesia Aviation Center (AIAC) flight observer Arista Atmadjati suggested that Garuda management should sort out flight routes so that the company could make a profit.

"Garuda is working on domestic markets that are already fat because in order to survive with the existing aircraft, they must choose wisely, such as the Jakarta-Semarang, Jakarta-Bali, Jakarta-Palembang, Jakarta-Medan, Jakarta-Balikpapan, Jakarta-Makassar, Jakarta-Jayapura routes. ," Arista said as quoted from Antara in Jakarta, Thursday, July 14.

"I think it is concentrated in the cities of business and trade, including Jakarta-Yogyakarta, because in Yogyakarta there are many government people who are fanatical about riding Garuda," he added.

Apart from sorting out flight routes, Arista continued, Garuda management is also advised to optimize the air transport cargo business considering that Indonesia is an archipelagic country that has 30 airports managed by Angkasa Pura I and Angkasa Pura II.

According to him, if the Boeing 737-800 NG series can be converted into domestic cargo, it will provide additional revenue for Garuda.

Arista said that Garuda could also optimize the charter flight business because many Chinese residents vacation in Indonesia, especially Bintan Island, Manado and Bali. China's charter aviation market is successful in all three cities.

Not only that, Garuda is also advised to streamline regional offices from four to only two regional offices, namely the West and East Indonesia regions because only 40 percent of the planes are left of normal.

"That was done by Garuda in 2000 and below, where in the past, Garuda's domestic market was still 60 percent and became the market leader," said Arista.

Furthermore, he said that in the past Garuda had area representatives in Amsterdam and Saudi Arabia which were held by the Greater Jakarta region.

Although there is a time difference, this condition is not an obstacle because communication can be via email, short messages, and various other platforms.

According to Arista, this step could reduce the number of domestic four to two, which are owned by Jakarta and Amsterdam and Saudi Arabia.

Moreover, the Asia and Australia regional offices can be reduced only in Singapore.

"So now it's divided into two for Japan and Korea, themselves. Asia itself, the problem is that Asia doesn't fly a lot. Garuda's offices are representative of Asia because there are no flights, so just Kuala Lumpur, Singapore, China, Korea, Japan, have made one. That's a lot of savings because representative organizations, especially overseas, are all paid in US dollars," said Arista.

Garuda officially passed the postponement of debt payment obligations (PKPU) which resulted in debt restructuring for the next 20 years.

Arista assesses that the success of passing the PKPU will be Garuda's momentum to improve the company's business and financial condition.

"The main director and the board of directors must dare to decide things that are not popular. For what? If you can't make a profit in 2022, at least reduce the burden of losses that are too big," he concluded.

Based on the financial statements (audited) for 2021, Garuda as a group recorded operating revenues of US$1.33 billion, a decrease of 10.43 percent compared to operating revenues in 2020.

The operating income was supported by scheduled flight revenues of 1.04 billion US dollars, non-scheduled flights of 88.05 million US dollars, and other revenues of 207 million US dollars.

In addition, throughout last year, Garuda as a group also recorded a decrease in operating expenses by 21.03 percent to US$2.6 billion when compared to the same period in 2020.

Garuda Indonesia President Director Irfan Setiaputra said that 2021 was the peak phase of the pandemic with the highest positive rate during the pandemic in Indonesia.

This condition has a direct impact on the level of public confidence in flying, resulting in a significant decrease in passenger traffic throughout last year.