Garuda Indonesia eyes return to stability this year<\/p>\n
SINGAPORE (Agencies): Indonesia's debt-ridden state airline
\nGaruda Indonesia is on target to meet its US$30 million profit
\ntarget for 1999 and expects business to return to normal after
\nthis year's elections, an executive said on Wednesday.<\/p>\n
\"The first three months were quite good and we are already in
\nthe target frame,\" Walter Prenzler, an executive vice president
\nat Garuda, told a news conference.<\/p>\n
\"We have already budgeted a figure of $30 million profit for
\n1999. We are confident of that,\" he said.<\/p>\n
Garuda made a loss of about 400 billion rupiah ($46.6 million)
\nin 1998.<\/p>\n
Prenzler, in Singapore with Indonesia's delegation to the
\nPacific Asia Travel Association trade show, said Garuda's seat
\nload factor was \"in the range of 68 percent\" in the first quarter
\nof 1999, and that the airline was hopeful it could see annual
\npassenger levels at about seven million in three to four years.<\/p>\n
Garuda's passenger numbers slumped to 4.1 million in 1998 from
\nabout seven million in 1997 as Indonesia's economic crisis seized
\nthe airline, forcing it to slash routes and reduce its fleet
\nsize.<\/p>\n
Garuda Indonesia now has a fleet of 40 aircraft with an
\naverage age of seven years, and flies to 21 international and 20
\ndomestic destinations.<\/p>\n
Most of the airline's revenues are in rupiah, which has lost
\nabout 72 percent in value against the U.S. dollar since July
\n1997.<\/p>\n
But the carrier had been performing much better since
\nSeptember, said Prenzler, after he and five other executives from
\nGermany's Lufthansa AG were appointed on a management contract to
\nhelp turn around the stricken airline.<\/p>\n
Deutsche Bank was also employed by the airline to restructure
\nits debt.<\/p>\n
Prenzler said those efforts were progressing.<\/p>\n
\"Garuda's foreign debt is in the range of $1 billion...We are
\nholding meetings with creditors and things are under control,\" he
\nsaid.<\/p>\n
The Lufthansa management contract was scheduled to run until
\nthe end of 2000. Its objective was to turn the airline into a
\ncompetitive, profitable operation by its completion.<\/p>\n
The contract could be extended by mutual agreement.<\/p>\n
Prenzler said Garuda's fortunes would improve after
\nIndonesia's parliamentary and presidential elections this year.<\/p>\n
\"After the elections we will have stability and then we can go
\nback to normal business,\" he said.<\/p>\n
He said Garuda could consider reinstating some of the routes
\nit had closed and add new destinations to its schedule next year.<\/p>\n
There was even the possibility of a code-sharing agreement
\nwith an as yet unidentified partner to restore its Jakarta-Los
\nAngeles route, Prenzler said.<\/p>\n
\"But that is more of a strategy for next year,\" he cautioned.<\/p>\n
Garuda Indonesia plans to submit a business plan to its main
\ncreditors in June as part of its efforts to restructure total
\ndebt of $1.08 billion, its president Abdulgani said in Jakarta
\nlast week.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/garuda-indonesia-eyes-return-to-stability-this-year-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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