ASEAN KEY DESTINATIONS
Garuda targets IPO in maintenance sector
National flagship carrier Garuda Indonesia says it plans to float shares of its maintenance unit in the next few years as it tries to tap into the continuing fleet expansion of the domestic airline industry.
Elisa Lumbantoruan, Garuda’s finance director, said on Monday that huge potential already existed in the aircraft maintenance market, which would grow larger in line with Indonesian airlines.
“The maintenance market is around $750 million. Most of that is being tapped by foreign companies, compared to local companies’ market share, which is 20 percent of that,” he said.
He also said the airline planned to publicly list its maintenance unit, Garuda Maintenance Facility AeroAsia, in the next three to four years.
Garuda itself started its expansion program, dubbed the “quantum leap,” last year. The airline plans to double its fleet of aircraft to 150 planes by 2015.
Its rival, Lion Air, Indonesia’s biggest low-cost carrier, plans to have 178 Boeings flying by 2016, while the local unit of budget carrier AirAsia plans to add 10 more planes from next year through 2015, using proceeds from a planned initial public offering in the fourth quarter.
Emirsyah Satar, the president director of Garuda, said earlier this year that if domestic airline expansion met its projected target, the value of aircraft maintenance services could increase to $2 billion by 2014.
However, GMF’s unaudited profit dropped by 62 percent to Rp 22.1 billion ($2.5 million) in the first nine months of last year from the Rp 58.6 billion profit recorded a year earlier. Its revenue fell by 16.5 percent to Rp 1.06 trillion last year from Rp 1.27 trillion a year earlier.
GMF has three hangars at Soekarno-Hatta International Airport that can accommodate 25 aircraft at one time. It plans to add another hangar at an estimated cost of around $50 million to $60 million.
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