GARUDA INDONESIA - JAKARTA. Flag carrier Garuda Indonesia expects to rebound from a 2018 loss to report a $70 million net profit in 2019 after shifting extra capacity to busier routes, its finance director said on Friday.
The airline restated its 2018 accounts to report a $175 million loss instead of a previously reported $5 million profit, after a government-imposed review of its accounting practices.
The accounting change resulted in a technical breach of debt covenants but lender Export Development Canada provided a waiver and would not take action, finance director Fuad Rizal told reporters.
The airline would issue a minimum of $500 million of bonds in the fourth quarter of 2019 to extend the maturity date of its debts, he said.
The carrier, which has benefited from rising domestic airfares, would optimise its capacity by increasing the frequency of flights on heavily trafficked routes and reducing it on those with less demand, Rizal said.
Garuda in March asked to cancel an order for 49 Boeing Co 737 MAX 8 jets, citing a loss of passenger trust following two crashes, although it had been reconsidering the order before the second crash in Ethiopia.
Rizal said talks with Boeing about the fate of the order were continuing. He had earlier said the 737 MAX jets on order might be swapped for another model
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