Reuters and the Jakarta Globe have reported that Garuda Indonesia’s net profits fell by an extraordinary 89% in 2016.
Public published financial reports showed that the national carrier’s profits in 2016 totaled US$8.07 million. This represents a significant drop compared to the US$76.48 million the company registered in 2015.
In a statement released on 22nd March, Arief Wibowo, who is CEO of Garuda Indonesia, said that “price competition is very tight in domestic and international (routes), causing yield to drop.”
Garuda Indonesia’s operating revenues increased 1.2% in 2016, while expenses increased 1.7%. Foreign exchange losses totaled US$19 million.
Despite the declining financial performance, Garuda’s stock price closed the year 1.2 percent higher, while the Indonesian stock index declined 0.6 percent for the year.