FINANCIAL PERFORMANCE ANALYSIS OF PT GARUDA INDONESIA TBK IN COMPARISON WITH OTHER REGIONAL AIRLINES

• Main Author: Maharani, Amanda
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/78790
• Institution: Institut Teknologi Bandung

The Asian Pacific region commercial aviation industry has been gaining attention due to its rapid growth in the industry. According to International Air Transport Association (IATA), this region is the world’s largest market for air transport and is expected to hold 37% of global traffic in 2017. Indonesia is one of the countries that is known for its contribution to the growth itself and it is predicted that there is a huge potential in its aviation industry. One of the leading airline contributors is Garuda Indonesia Garuda Indonesia is the flag carrier of Indonesia which operates as a full service airline with destinations over 51 destinations around the world. It has become the largest airline in Southeast Asia which carries over 160,000 passengers. This airline serves approximately 33 domestic and 18 international destinations in Asia, Australia, and Europe (The Netherlands). In recent years, Garuda Indonesia has won several awards for its remarkable service and became one of Skyteam members along with other 20 world renowned airlines. Garuda Indonesia is now recognized as a world-class airline and trusted to excel Asia Pacific aviation industry. This study analyzes the financial performance of the Indonesian aviation industry, with specific reference to the PT. Garuda Indonesia, Tbk. The researcher compares the performance of the airline with five other Asian Pacific airlines to get a clearer comparison and overview of the Asian Pacific aviation industry. The financial performance of each airline will be analyzed during the year of 2010-2014. There are three methods used in this analysis, which are financial ratios, optimal capital structure, and risk analysis. The financial ratios which are used in this research are liquidity ratio, profitability ratio, and solvency ratio to determine the financial performance each year. The declining performance is occurred due to large investment on aircrafts and resources, the rising domestic jet fuel price and depreciation of Indonesian local currency. By using effective hedging strategy and use the right portion in the company’s capital structure, the company could enhance its financial condition. Revenue must be increased to meet its expenses, since the expenses exceed its sales. The result of this analysis will be given to PT. Garuda Indonesia, Tbk. to improve the financial performance of the company and can be used as a reference for other airlines to study financial performance of other airlines.