JAKARTA: National flag carrier PT Garuda Indonesia Tbk plans to buy at least 24 aircraft from different airplane producers over next two years as part of the company’s long-term program to further boost both domestic and international flight services.
The airline’s President Director Arif Wibowo said that the purchases of the 24 aircraft, which are estimated to cost the airline up to US$1.85 billion, would be carried out from June of this year through to December 2017.
The airline intends to expand flight services in response to State-owned Enterprises Minister Rini Soemarno’s recent call to increase its fleet to 450 aircraft from the current number of 168 within the next five years, he said.
Approximately 80 percent of the purchases will be carried out under operating leases while the other 20 percent under financial leases, Garuda’s finance director, I Gusti Ngurah Askhara Danadiputra, said. He added that the proportion might change depending on the company’s financial condition three years ahead.
The 24 aircraft consist of 11 units of Airbus A-330, nine units of ATR types, three units of Boeing 777-300 and one unit of Boeing 737-MAX, I Gusti explained.
Arif said that the purchase was in line with the company’s 10-year business roadmap. The roadmap stipulates that the compan should possess a total of 53 units of wide-body type aircraft by 2025.
“Until 2025, we still need to count how many of our aircraft fit our business strategy,” Arif told reporters during a breaking of the fast gathering in Central Jakarta on Sunday. He added that Garuda currently had 22 units of wide-body aircraft with nine more units to come by next year.
Last month, Garuda signed an agreement at the Paris Air Show to order 60 new planes from US aircraft manufacturer Boeing and 30 wide-body planes from French aircraft manufacturer Airbus.
The $20 billion transaction consisted of $10.9 billion for 30 Boeing 787-9 and 30 737 MAX8 planes, while the other $9.1 billion went for 30 Airbus A350 XWB aircraft, according to Bloomberg report.
The signing was part of the company’s revitalization and fleet development program to support its planned route changes, which will include more medium and long-range flights.
The signing was also part of Garuda’s plan to expand its international routes from its present number of 66.
I Gede said recently that the company planned to open new routes to Germany and France this year, in addition to targeting other markets in China and the Middle East. The planned French and German routes will run four times a week.
Garuda reversed last year’s massive losses to make a profit in the first quarter of this year, thanks to rising revenues and a drop in fuel expenses.
The state-owned company booked $11.4 million in net profit in the January-March period this year, a stark contrast from a $168.04 million net loss in the same period of last year, according to its unaudited financial report filed with the Indonesia Stock Exchange (IDX).
Garuda’s increase in international passenger traffic contradicted the overall weakness in international travel by Indonesians as the number of passengers traveling to international destinations dropped 3.54 percent to 3.2 million in the first quarter of this year from the same period of last year, Central Statistics Agency (BPS) data showed.
