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Bullish on Garuda

Garuda Indonesia CEO Optimistic Airline Will Continue to Grow Even in Difficult Times for Global Aviation

(3/23/2012) Garuda Indonesia is targeting a 20% increase in income in 2012 over 2011, hoping to achieve sales of Rp. 32.6 trillion (US$3.55 billion).

The increase in income will be bolstered by an expanded fleet of aircraft despite projections from the International Air Transport Association (IATA) predicting a decline in worldwide income for airlines due to the ongoing economic crisis in Europe.

Garuda’s CEO, Emirsyah Satar, told Bisnis.com, “I am optimistic that income will still grow above 20% when compared to last year which totaled Rp. 27.16 trillion, even though IATA is reducing growth in passenger income due to the crisis in Europe.”

The Garuda boss defended his airline’s ambitious growth targets by pointing to the high growth rate of the Indonesian economy and the tendency for airline growth to outpace by a factor of 1.5 to 2 the growth rate of the host nationsl economy. Emirsyah also points to the global economic crisis of 2008, when domestic and international passengers for Indonesia continued to expand.

Emirsyah is bullish on Garuda’s competitive edge over its foreign competitors. Garuda’s income grew 39% in 2011 and profits by 60%. Meanwhile, during the same period foreign airlines only managed to increase their incomes by 2% while profits declined 59%.

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