Jakarta. Garuda Indonesia (IDX: GIAA) has slipped back into negative equity as higher fuel costs weigh on Indonesia’s flag carrier despite stronger revenue and a government-backed capital injection.

Equity fell to negative $163 million as of June 30, from negative $39.3 million at the end of 2025, according to financial statements filed with the Indonesia Stock Exchange (IDX). Total equity was negative $52.2 million after non-controlling interests of $110.8 million were included.

The reversal comes less than a year after Garuda restored positive equity following a $1.4 billion capital injection from Danantara Asset Management. The injection, approved in November 2025, was intended to support the airline’s restructuring and fleet recovery. 

Garuda’s revenue nevertheless rose 16% to $1.80 billion in the first six months of 2026 from $1.55 billion a year earlier, while its net loss narrowed 23.2% to $113 million, according to the company’s latest financial report. 

Scheduled flights remained the largest revenue contributor, generating $1.31 billion, up 10.9% from a year earlier. Revenue from non-scheduled flights jumped 32.5% to $272.8 million, helped by a 51.6% increase in revenue from Hajj flights to $232.2 million.

Other revenue rose 32.2% to $209.2 million, including a 43.8% increase in aircraft maintenance, repair, and overhaul revenue to $87.4 million.

Garuda’s earnings before interest and taxes rose 12.7% to $74 million, while EBITDA increased 5.8% to $431.6 million.

GIAA shares fell 5% to Rp54 in early trading Thursday

Fuel Erodes Gains
The improvement came despite a sharp increase in jet-fuel costs. Garuda’s fuel expense jumped 43.6% to $677.6 million, accounting for about 38% of revenue, compared with 30.5% a year earlier. The increase accounted for most of the rise in operating expenses, according to the company.

Garuda managed to contain other costs. Non-fuel expenses rose just 3.9% to about $1.07 billion, slower than revenue growth. Agent commissions fell 6.2% to $33.6 million, while cash payments to employees declined 7.2% to $219.7 million as the group’s workforce shrank.

Financial expenses also fell 11.6% to $222.4 million, partly reflecting the impact of the Danantara capital injection and debt restructuring.

The airline had 104 aircraft in operation as of June, according to its financial disclosures.

President Prabowo Subianto has acknowledged that Garuda came close to bankruptcy after dozens of its aircraft were grounded, but said the airline’s recovery had raised hopes of a return to profitability after years of losses.

He said Garuda could have turned a profit as early as July if not for the escalation of conflict in the Middle East, which drove up global fuel prices.

“We now hope that at the beginning of 2027 they will start making a profit,” Prabowo said in an Aug. 14 speech to the People’s Consultative Assembly.

Still, the return to negative equity highlights the airline’s continuing financial vulnerability. Total liabilities stood at about $7.4 billion at the end of June, down from $7.6 billion at the end of 2025, while total assets also declined to $7.4 billion.

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