High fuel prices drive 2Q loss at Garuda despite improved load factors and spike in revenues

Garuda Indonesia’s string of three consecutive years of profit, which began after its 2007 restructuring, is in jeopardy as the carrier has now recorded losses for two consecutive quarters. But Guruda remains bullish on its medium-term outlook as it continues to rapidly expand revenues, improve load factors, grow its market share and work on turning around the performance of its LCC unit Citilink. [1830 words]

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This report contains the following subheadings:

• Garuda records significant improvement in domestic and international market share
• Citilink operating margin shows signs of improvement
• Citilink fleet temporarily shrinks and 2H2011 fleet plan adjusted
• Demand remains high but profits are unlikely unless fuel prices drop

This report contains the following charts and tables:

• Garuda Indonesia financial highlights, 2Q2011
• Garuda financial highlights (IDR billion), 1H2011
• Garuda’s share of Indonesian domestic and international markets, Jan-May 2011 vs Jan-May 2010
• Garuda fleet as of 30-Jun-2011 and fleet plan for rest of 2011
• Garuda group operating indicators, 2Q2011 vs 1Q2011 and 2Q2010
• Garuda mainline domestic operating indicators, 2Q2011 vs 1Q2011 and 2Q2010
• Garuda Citilink unit domestic operating indicators, 2Q2011 vs 1Q2011 and 2Q2010
• Garuda international operating indicators, 2Q2011 vs 1Q2011 and 2Q2010