Amid economic slowdown, volcanic eruptions and one of the worse haze disasters in Indonesian history, state-owned flag carrier Garuda Indonesia has managed to turn in a strong financial performance, turning a net profit of $51.4 million in the first nine months ending in September and reversing a loss of $220.1 million during the same period last year.
For weeks, thousands of fires caused by slash-and-burn farming on the Indonesian islands of Sumatra and Kalimantan along with parts of Sulawesi, Papua and Java have choked vast expanses of Southeast Asia, forcing airports to close and airlines to cancel scores of flights.
Garuda alone has suspended around 2,000 flights since September, including roughly 500 flights in recent weeks following the temporary closure of two airports on the island of Papua and one airport on Sulawesi Island. Garuda’s chief executive Arif Wibowo said that Indonesian forest fires has cost the airline roughly $8 million in lost sales and other expenses.
Nevertheless, Garuda has managed to increase its total revenue to $2.845 billion in the January to September period compared with $2.831 billion in the previous year while total expenses fell to $2.72 billion from $3.08 billion.
Garuda’s economic success has allowed the airline to continue with its $2.5 billion fleet acquisition plan as it looks to replace its aging fleet with 50 new aircraft. The airline continues to consider new sources of funding options, including bond issuance, export credit agency debt and cash reserves to finance the buying program.
Meanwhile, other carriers in the region have not fared nearly as well as Garuda. For example, Indonesia’s Kalstar Aviation, which became the first Indonesian Embraer E195 operator in January, operates 90 percent of its flights out of Kalimantan and expects to incur millions of dollars in lost revenue. In the last two months, the airline has had to cancel more than 1,000 flights following the closure of ten airports.
In the Philippines, both Philippine Airlines and Cebu Pacific have had to delay or temporarily suspend dozens of domestic and regional flights. Operational disruptions have hit Manila International Airport and 10 airports on the large southern Philippine island of Mindanao. Airports at Clark, Cebu and Busuanga in central Philippines have also grounded all aircraft incapable of instrument approach landings.
Meanwhile in Malaysia, AirAsia, Malindo Air and Firefly have all had to temporarily cancel services due to lingering haze.
Indonesia is calling on the international community to provide fire suppression support. Two Russian Beriev Be-200 amphibious water-bombers have been deployed along with 32 helicopters and aircraft, including seven fixed wing-water bombers and four planes for cloud seeding from Australia, Malaysia and Singapore.