Indonesia's State Enterprises Ministry stated Garuda Indonesia's plans to conduct an IPO is on track for Feb-2011 (Jakarta Globe/Dow Jones, 09-Nov-2010). The Ministry also corrected its financial results for the Jan-2010 to Sep-2010 period from a USD4.4 million loss to a USD22 million profit. The correct data had been verified by Deloitte. The carrier's IPO plans were in doubt due to the loss result in the period. The carrier stated it expects the bottom line to improve in 2011 due to higher revenue and lower cost of operations. The carrier plans to sell a stake of up to 40% in the IPO, expected to raise up to USD400 million. The carrier will hold a marketing roadshow in Singapore, Hong Kong, London, Dublin, Boston and New York later this month. The proceeds from the IPO will be used to help finance capital expenditure over the next three years.
Garuda IPO back on track for Feb-2011; financial results corrected
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Indonesia refuses to approve Singapore Airlines and Lufthansa JV, protecting Garuda once again
Indonesia has taken another step backwards from liberalisation with moves that benefit flag carrier Garuda at the expense of Singapore Airlines (SIA). In the latest examples, Indonesia is refusing to approve SIA’s new joint venture with Lufthansa and allow SIA to launch a new fifth freedom route from Jakarta to Sydney.
Refusing to allow SIA and Lufthansa to coordinate prices and schedules in the Indonesia-Europe market may not have a significant impact on the overall SIA-Lufthansa JV. However, it is an unfortunate move by Indonesian authorities to protect Garuda ahead of the airline's potential launch of services to Germany.
Preventing or delaying SIA from launching Jakarta-Sydney has a bigger short term impact as it leaves in place – at least for now – the Garuda and Qantas duopoly in a growing market. SIA has also been temporarily stripped of 19 weekly slot pairs at Jakarta Soekarno-Hatta International Airport, in another related and seemingly protectionist move.