Minister slams Garuda over losses<\/p>\n
JAKARTA (JP): Minister of Transportation Haryanto Dhanutirto
\nslammed yesterday state-owned air carrier Garuda Indonesia for
\nits recent huge losses and doubted the company would reach its
\nprofit target of Rp 300 billion this year.<\/p>\n
He said Garuda had become a "parasite" with total losses
\nreaching Rp 122.8 billion (approximately US$42.34 million) in the
\nfirst half of this year.<\/p>\n
"We have to lower Garuda's estimated profit this year to Rp
\n300 billion from Rp 460 billion," Haryanto told members of the
\nHouse of Representatives in a hearing yesterday.<\/p>\n
Haryanto saw the development as ironic as Garuda was
\noriginally projected to be one of the most profitable companies
\nunder his ministry's supervision.<\/p>\n
"Garuda must realize this situation and I would like to
\nsupport the national flag carrier in its efforts to recover," he
\nadded.<\/p>\n
He did not say how or why Garuda suffered such big losses.<\/p>\n
"The government has injected $754 million to improve the
\ncompany's financial performance. It's not a small amount, but
\nGaruda still suffered losses due to its inability to control its
\nhigh costs," the minister said.<\/p>\n
The airline also suffered an operational loss of Rp 87.44
\nbillion last year, as against total losses of Rp 342 billion in
\n1995. But Rp 212.09 billion in revenue from assets (aircraft and
\nspare parts sales) improved its bottom line last year with a
\nprofit of Rp 124.65 billion.<\/p>\n
Garuda's president, Soepandi, who failed to appear at
\nyesterday's hearing, said earlier that losses last year and in
\nprevious years were caused mostly by rising fuel prices and jet
\noverhaul costs.<\/p>\n
Haryanto reiterated yesterday that Garuda had to focus on its
\ncore business and shed some of its subsidiaries.<\/p>\n
Merpati<\/p>\n
The airline has subsidiaries and affiliated firms which
\noperate hotels, catering, travel and transportation services.
\nGaruda is currently in the process of selling two hotels in
\nLombok, West Nusa Tenggara, and Sanur, Bali, which are owned and
\nrun by its subsidiary PT Aerowisata.<\/p>\n
While criticizing Garuda, Haryanto said that money-losing
\nMerpati Nusantara Airlines was expected to break even this year
\nafter splitting away from Garuda last April.<\/p>\n
Nonetheless, he said yesterday the company still posted a loss
\nof Rp 40.86 billion in the first half this year.<\/p>\n
Merpati has been hurt by a number of unprofitable routes as
\nwell as inefficiency due to its wide range of aircraft types.<\/p>\n
Merpati's losses dropped slightly to Rp 130 billion in 1996
\nfrom Rp 133 billion in 1995. The company is also burdened with
\nsome Rp 600 billion in debts which it expects to be converted
\ninto new government equity shares.<\/p>\n
Haryanto said yesterday that in addition to Garuda and
\nMerpati, there were four other firms under his office's
\nsupervision which suffered losses in the January to June period
\nthis year.<\/p>\n
He said public city bus operator Perum PPD suffered a Rp 7.15
\nbillion loss, PT Varuna Tirta Prakasya Rp 322 million, PT
\nDjakarta Lloyd Rp 1.85 billion and dredging company PT Pengerukan
\nIndonesia Rp 1.4 billion.<\/p>\n
"The combined profits of the 18 state transportation
\nenterprises reached Rp 173.27 billion in the first half of 1997,
\nmuch lower than Rp 492.73 billion originally targeted by the
\ngovernment," he said.<\/p>\n
He estimated their total profit for the whole year at Rp 1.08
\ntrillion, up from Rp 807 billion in 1996.<\/p>\n
Among the firms making a profit in this year's first half were
\nrailway company Perumka (Rp 5.94 billion), bus operator Perum
\nDamri (Rp 4.38 billion), ferry operator PT ASDP (Rp 5.69
\nbillion), airport management firms PT Angkasa Pura I (Rp 53.03
\nbillion) and Angkasa Pura II (Rp 69.09 billion).<\/p>\n
PT Pelabuhan Indonesia II, which manages Tanjung Priok seaport
\nin Jakarta and several other ports in West Java and South
\nSumatra, netted the biggest profit of Rp 106.36 billion in the
\nfirst half. (icn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/minister-slams-garuda-over-losses-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}