Garuda to impose new ticket surcharge soon<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
Flag carrier Garuda Indonesia plans to introduce a new surcharge
\non tickets amid soaring global oil prices, which has seriously
\naffected the price of jet fuel, a senior airline official said.<\/p>\n
Garuda commercial and marketing director Bachrul Hakim said
\nthe company was set to implement the surcharge before the
\nupcoming peak season that starts a week before the Idul Fitri
\nholiday.<\/p>\n
Idul Fitri falls on Nov. 15 and Nov. 16 this year.<\/p>\n
\"We will introduce the surcharge on all domestic and
\ninternational flights as soon as possible before the holiday
\nseason to cope with soaring oil prices,\" Bachrul said on Thursday
\nafter a ceremony to mark a cooperation with Citibank.<\/p>\n
The airline has set the Idul Fitri peak season from Nov. 11 to
\nNov. 22, and the Christmas and New Year peak season from Dec. 22
\nto Jan. 3, 2005.<\/p>\n
Bachrul refused to disclose the amount of the planned
\nsurcharge, but said it would not differ much from the range of
\nUS$10 to $15 per flight imposed by other international airlines.<\/p>\n
\"Garuda's average price ceiling for fuel is about $35 per
\nbarrel, but now the price has risen to more than $40. So we have
\nto seek ways to offset losses resulting from the problem,\" he
\nsaid, adding that Garuda had also been cutting costs in all
\ndepartments for efficiency.<\/p>\n
Fuel accounts for about 40 percent of Garuda's operational
\ncosts.<\/p>\n
The surcharge plan has been submitted to the Indonesian
\nNational Air Carriers Association (INACA) for approval.<\/p>\n
Oil prices have jumped 66 percent this year on high demand
\namid disrupted production in several oil-producing countries,
\nincluding Iraq and Russia. U.S. crude oil has reached a record
\n$54.45 a barrel, while Brent crude hit $51.50 a barrel on
\nTuesday.<\/p>\n
On Sept. 15, Garuda imposed a 100 percent surcharge on select
\ninternational routes, such as to Japan and Australia.<\/p>\n
Bachrul said the airline would maintain the surcharge until
\nglobal oil prices fell back to a preferred average of under $35
\nper barrel.<\/p>\n
\"A ticket surcharge is not like a ticket rise, in which we
\nincrease the base rate. This is just a temporary hike to cope
\nwith the jump in oil prices. Garuda will probably raise its
\nticket price next year,\" said Bachrul.<\/p>\n
Garuda is undergoing a restructuring program due to its
\nmassive debt accrued from rampant internal corruption during the
\nformer New Order regime, when government officials often used the
\ncompany as their personal cash cow.<\/p>\n
To date, it is unclear how the airline with settle its $800
\nmillion debt, as its 2004 profit would be unlikely to be enough
\nto fully service its debts.<\/p>\n
Worse still, the Office of the State Minister of State
\nEnterprises has left the Garuda management hanging in the balance
\nfor over a year, as it has yet to select a new president to
\nreplace outgoing chief executive officer Indra Setiawan, whose
\nterm has ended.<\/p>\n
State Minister of State Enterprises Laksamana Sukardi had
\npreviously insisted on putting his brother Samudra Sukardi at the
\nhelm of the national airline, but many parties have objected to
\nthe plan on the grounds of nepotism.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/garuda-to-impose-new-ticket-surcharge-soon-1447893297",
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