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Indonesian airline Garuda appoints banking executive as CEO
[JAKARTA] PT Garuda Indonesia has appointed banking executive Pahala Mansury as its new chief executive as the state-controlled airline seeks to revive its fortunes after a slide in profit last year.
Mansury leaves his post as chief financial officer of PT Bank Mandiri to replace outgoing Garuda CEO Arif Wibowo and is charged with ransforming the operational and financial conditions of the airline, including renegotiations with aircraft lessors, Gatot Trihargo, Indonesia's deputy minister for state-owned enterprises, said on Wednesday.
"At the moment (Garuda) is negotiating with aircraft lessors ... Hopefully, Pahala's reputation will give credibility among creditors," Mr Trihargo said.
Garuda reported an 89 per cent plunge in 2016 net profit last month, citing intense competition on domestic and international routes. The appointment of a CEO with strong financial background is a positive move for the company and would be welcomed by the market, said Taye Shim, head of research at Mirae Asset Sekuritas in Jakarta.
"I think it's a good sign, given earnings fluctuation was the key culprit for the company's share price weakness," Mr Shim said.
Shares in Garuda have gained 6.5 per cent this year and were at 360 rupiah (S$0.042) on Wednesday, but the price remains well below last year's peak of 565 rupiah before a 40 per cent fall towards the end of the year.