Garuda eyes $31m in profits this year

Garuda eyes $31m in profits this year

JAKARTA (JP): National flagship carrier Garuda Indonesia said
on Tuesday it expects Rp 280 billion (US$31 million) in net
profit this year, a drastic rise from the estimated Rp 400
billion net loss incurred last year.

The airline's president, Abdulgani, said the company's
revenues would shrink slightly to Rp 7 trillion this year from
over Rp 10 trillion in 1998 because the strengthening rupiah
would lower its dollar-denominated revenues from international
flights.

The company does expect to book about Rp 600 billion in
operational profit, he said.

Last year, Garuda recorded Rp 10 billion in revenues, 70
percent of which came from passengers and 30 percent from cargo,
but it suffered a huge net loss because of rising operating costs
and fewer flights.

Garuda operates a fleet of 40 aircraft on domestic and
international routes.

Pudjobroto, Garuda's spokesman, said that last year's high
revenues were due to the rupiah losing ground against the U.S.
dollar, increasing dollar-denominated income from international
flights.

The rupiah dropped sharply against the dollar last year,
reaching the Rp 16,000 level against the greenback before
bouncing back to the current Rp 9,000 level.

Abdulgani said Garuda's offshore debts, totaling about $390
million, were currently being restructured by the airline's
financial consultant, Deutschebank.

Garuda is also currently in the process of converting Rp 1.4
trillion of a government loan into equity in the airline, he
said. (das)