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JAKARTA Sept 12 (Reuters) - The new boss of Indonesia’s Garuda has abandoned the state-owned airline’s hopes of making a profit this year, saying he aimed to keep losses to less than $100 million despite rising fuel prices and a weaker rupiah.
Ari Askhara was announced as chief executive on Wednesday following a shareholder meeting. He replaces Pahala Mansury, who was in the job for just 17 months and said in July he still hoped the airline could break even this year.
“We are determined to reduce our losses by a minimum target of below $100 million by the end of year,” Askhara told reporters.
“The current condition is more difficult. The rupiah has depreciated and oil prices are likely to increase,” he added.
Askhara said he would look at increasing profitable flying routes for new markets, including for Japan and China, and would renegotiate the company’s aircraft leases.
“Garuda will also finalize its memorandum of understanding (MoU) regarding shares selling with its aircraft maintenance and repair unit Garuda Maintenance Facility AeroAsia (GMF AeroAsia) and strategic partners,” he said.
The new CEO, whose full name is I Gusti Ngurah Askhara, had until Tuesday headed state-owned enterprise PT Pelabuhan Indonesia 3. He is also a former chief financial officer of Garuda.
Mansury had been criticized by staff for his cost-cutting The Garuda Pilot Association (APG) briefly threatened in July that at least 1,300 pilots and 5,000 cabin crew members from the carrier would go on strike over complaints about management, a reduction in flight hours and the removal of annual raises.
However, he told reporters that there had been “no problems” with the union, only “miscommunications.”
Six directors on Garuda’s board were replaced on Wednesday, including Mansury.
The flag carrier reported a $116.86 million net loss for the first six months of the year, versus a $281.8 million net loss in the same period last year, when the company was hit by big one-off costs related to Indonesia’s tax amnesty programme. (Reporting by Cindy Silviana; Writing by Fanny Potkin; Editing by Clarence Fernandez and Mark Potter)
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