December 18, 2017 / 12:01 PM / a month ago

Garuda's international traffic hit by Bali's volcanic eruption

JAKARTA (Reuters) - National airline Garuda Indonesia (GIAA.JK) has estimated its international traffic will be down by 15 percent in the period between mid-November and the year’s end due to the volcanic eruption on the holiday island of Bali.

However, the lossmaking airline aims to be back in profit next year with an increase in revenue of 10-12 percent, Chief Executive Pahala Mansury said on Monday.

PT Garuda Indonesia Tbk reported a $222 million net loss for in the first nine months of 2017.

Asked about the impact of the eruption of the Mount Agung volcano, which has cut tourism on Bali and shut the airport for several days last month, Mansury said local demand for travel to Bali had held up better than international flights.

“The impact to domestic demand is not too significant. It only decreased by 5 percent,” Mansury told reporters.

Garuda Indonesia airplane as seen at tarmac of the Soekarno Hatta airport in Jakarta, Indonesia, December 18, 2017. REUTERS/Beawiharta

“However, our forecast for decreasing demand is around 15 percent for international passengers, mostly from China,” he said.

The 3,000-metre (9,800-foot) volcano has shown a marked increase in activity in the last few months, stoking fears of a repeat of an eruption in 1963 that killed more than 1,000 people.

    Authorities raised the alert status to the maximum after it started erupting last month, causing travel chaos by closing the island’s airport for nearly three days.

    Operations have since returned to normal at Bali’s airport, though there have been some travel cancellations, mostly by foreign visitors.

    Mansury said that the airline aims to carry 37-39 million passengers in 2018, up from an estimated 35-36 million passengers this year.

    Reporting by Cindy Silviana; Writing by Ed Davies; Editing by Susan Fenton, Greg Mahlich

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