Indonesia State Enterprises Minister Mustafa Abubakar confirmed Garuda Indonesia will launch its IPO in two phases (The Jakarta Globe, 19-Nov-2010). The first phase of the offering is to be held in Feb-2011, in which the carrier will offer a 30% stake. Mr Abubakar stated the second stage for a further 10% stake will be held at a later date “when necessary”. He stated he is “optimistic” the sale will perform well “despite its below-par performance this year”. Garuda plans to submit its IPO proposal to the Indonesia Stock Exchange this week. The offering is expected to raise USD450 million.
Indonesian Government states Garuda Indonesia to hold IPO on two stages
You may also be interested in the following articles...
Garuda Indonesia international outlook Part 1: further expansion despite weak 1H2016 results
Garuda Indonesia is planning further international expansion in 4Q2016 and 2017, despite a recent lacklustre performance in the international market. Garuda is adding capacity to China in 4Q2016 and aiming to launch services to the US in 2017.
Garuda’s international load factor was only 70% through the first eight months of 2016 as the airline struggled to fill additional seats generated by an 18% increase in ASKs. International yields have also declined as Garuda swung back into the red in 1H2016.
The long haul network has particularly struggled, driving the drop in profitability. However Garuda is keen to continue strategic expansion.
Singapore Airlines to launch Jakarta-Sydney, further intensifying SE Asia-Australia competition
Singapore Airlines (SIA) will launch services from Jakarta to Sydney in Nov-2016, resulting in new competition for rivals Garuda Indonesia and Australia’s Qantas Airways. SIA’s entrance on the Jakarta-Sydney route is a strategic move and highlights its desire to pursue new areas of growth.
The Indonesia-Australia market is a logical market for SIA as it seeks to diversify its business. Indonesia and Australia are already SIA’s two largest international markets and Garuda and Qantas are already among its biggest competitors.
Competition within Asia Pacific, including the Southeast Asia-Australia market, has been intensifying. In the current highly competitive and challenging environment airlines are constantly jockeying and exploring new options to improve their position.