Garuda Indonesia to Delay Delivery of 20 Aircraft

Indonesia’s national airline PT Garuda Indonesia Tbk is in talks with Airbus SE and Boeing Co to delay the delivery of 20 planes, the flag carrier said, as it seeks to better utilize its current fleet and trim costs.

Garuda and its budget unit Citilink were supposed to have taken delivery of the aircraft during the two years through to 2019, Chief Executive Pahala Mansury told reporters, without giving a new date for the delivery. The first aircraft to be postponed will start from the fourth quarter of 2017.

With the postponement, Garuda can increase the utility of its aircraft to 11 hours per day from the current 9 hours and 38 minutes per day, Garuda CEO noted.

“We want to focus on the optimization of our existing fleet,” Mansury said. As the majority shareholder, the State-owned Enterprises Ministry has approved Garuda’s plan. “We are in the process of discussing (the plan), and the discussion has moved in a positive direction,” added Mansury.

Garuda reported a wider net loss for the first half of 2017, hurt partly by the costs of participating in the government’s tax amnesty scheme. Following the loss, the state-controlled carrier also sought consent to amend certain terms on its $500 million global sukuk bonds due 2020.

Mansury did not disclose the model of the delayed planes, but Garuda spokesman Ikhsan Rosan told Reuters they are made by Airbus and Boeing, including A320s ordered by Citilink.

“We don’t comment on discussions we may or may not be having with customers,” an Airbus spokesman said.

A Boeing spokeswoman said the airline worked with Garuda, as with all of its customers, on how to best optimise the airline’s fleet.

Citilink has 25 Airbus A320neos on order while parent company Garuda Indonesia has 50 Boeing 737 MAX aircraft on order, according to the Airbus and Boeing order books.The airline still hopes to make a total profit of US$70 million by the end of the year.

(Source: Reuters)