Garuda Indonesia may not meet target for reducing losses<\/p>\n
Arijit Ghosh, Bloomberg\/Jakarta<\/p>\n
PT Garuda Indonesia, the nation's biggest airline, may not meet
\nits target to cut losses by 50 percent this year after bookings
\nslowed amid rising fuel costs following the Oct. 1 suicide
\nbombings in Bali.<\/p>\n
The Jakarta-based airline may report a loss of as much as
\nUS$70 million in 2005 higher than its previous estimate of about
\n$40 million, President Emirsyah Satar said. The company posted a
\nnet loss of Rp 811.3 billion ($82 million) last year, the first
\ntime in three years.<\/p>\n
Indonesia's revenue from tourists may decline 5.7 percent this
\nyear to $4.5 billion, the nation's tourism ministry said on
\nThursday because of the Oct. 1 suicide bombings in Bali, the
\nspread of avian influenza in the country and last year's tsunami.
\nFewer ticket sales combined with higher fuel costs are likely to
\naffect the company's targets.<\/p>\n
\"Our target was to reduce the losses, before the Bali bombings
\nwe were quite positive to cut it by half now our target is still
\nto reduce\" it though not as drastically,\" Satar said.<\/p>\n
On Oct. 1, three suicide bombers killed themselves and 20
\npeople on Bali. The attack was the worst terrorist incident in
\nIndonesia since a bombing last year outside the Australian
\nEmbassy in Jakarta, which killed at least nine people.<\/p>\n
Air Paradise International Pte, an Indonesian airline flying
\nbetween Bali and Australian cities, on Nov. 23 suspended all
\nservices as demand fell after the bombings.<\/p>\n
Garuda's plans to delay paying up to $515 million of debt may
\nalso take \"quite some time,\" because its creditors are yet to
\napprove the proposal, Satar said.<\/p>\n
\"We haven't got any response\" from the creditors yet.<\/p>\n
The carrier is waiting for approval from creditors to delay a
\n$50 million principal payment of $150 million floating-rate notes
\ndue by the end of this month, Satar said on Dec. 7.<\/p>\n
The company has hired PT Danareksa and NM Rothschild & Sons
\nLtd. to help revamp its debt.<\/p>\n
The bid to reschedule debt payments is an effort by
\ngovernment-owned Garuda, which fired its entire management board
\nin March, to improve its management and be profitable.<\/p>\n
Garuda, named after a mythical bird that carries the Hindu god
\nVishnu, needs $115 million a year to repay more than $800 million
\nof debt and about $1 billion more for wages, jet fuel,
\nmaintenance and other costs, according to its annual report.<\/p>\n
To protect Garuda and two other state-owned airlines,
\nIndonesia's government banned more overseas discount carriers
\nfrom landing in Jakarta and other cities, including Medan,
\nSurabaya and Denpasar.<\/p>\n
Indonesia, with 18,000 islands and a population of 238 million
\npeople, has 26 airports and at least 18 airlines.<\/p>",
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