Garuda to refocus on cargo while ending London and Nagoya flights

Garuda Indonesia intends to give air freight a greater emphasis this year, targeting a 10% rise in cargo revenue, and will end its flights to London and Nagoya. In an investor presentation on its full-year 2019 results, the airline says it aims to both to transport higher-margin goods and to increase the absolute volume of cargo carried. Beyond its plans to stop serving the UK's capital and Nagoya in Japan, Garuda's cost-cutting efforts include talks with lessors on payment deferrals.

Likewise, it is seeking to agree payment delays with airport operators and the oil and gas company Pertamina. Garuda has also flagged plans to restructure its sukuk, and is hoping to negotiate with the Indonesian government on the price floor for domestic tickets. Additionally, the carrier aims to sell tickets in bulk through a "hard block" strategy; to expand its codeshare and interline relationships to cover markets in Europe and the USA; and to launch new routes to the Middle East from secondary Indonesian points.

A dedicated cargo fleet is also targeted. To increase productivity and cost efficiency, an employee productivity review will be conducted. This year, the Garuda group will operate 218 passenger aircraft and three freighters.

Garuda will receive four Airbus A330-900 passenger jets and three freighters: an A330 and two Boeing 737s. A 737-800 will be phased out. Low-cost subsidiary Citilink will receive one A330-900 and 18 ATR 72-600s.

Out of the 18 ATR 72s,13 are to be transferred from parent Garuda. One A320 will be removed from service. Garuda made an operating profit of £147 million in 2019, a turnaround from a £199 million loss in 2018.

Revenue was up 5.6% at £4.57 billion.

Garuda was also profitable on a net level in 2019, to the tune of £7 million, reversing the £232 million net loss in 2018.

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