Garuda increases cargo tariffs up to 35 percent

JAKARTA (JP): Flag carrier Garuda Indonesia raised its domestic cargo tariffs by a range between 30 percent and 35 percent as of Dec. 1.

Chandra Giri, the head of the airline's cargo division, said the tariff increase was made to compensate for the depreciation of the Indonesian rupiah against the U.S. dollar and higher fuel prices.

The tariff increase in the airline's cargo service was the first in the last three years, Chandra said. He said within the last three years, Garuda had suffered a significant loss from the depreciation of the rupiah against the dollar.

The cargo tariff was set in rupiah, based on the value of the dollar at that time, while most of the airline's leasing expenses were in U.S. dollars.

Like other airlines, Garuda was also affected by a continued increase in fuel prices, which increased by an average of 25 percent per annum.

"The International Air Transport Association actually recommended its airline members a few months ago to add a US$0.1 surcharge per kilogram to their cargo services to anticipate the rising price of fuel," he was quoted by Bisnis Indonesia as saying. "We, however, imposed the surcharge only recently. So it did not help much," he said.

The national flag carrier has recently leased two cargo jets of the B-737-200C series from a Malaysian firm in a bid to cash in on the booming Asian airfreight business.

The two cargo jets will serve domestic cargo linking major cities in eastern Indonesia, including Surabaya, Denpasar, Ujungpandang, Manado and Biak, as well as Irian Jaya.

Garuda has so far operated only one of the two jets. The other is expected to arrive next month.

"A jet is leased for around $2,400 an hour," Garuda's vice president for cargo planning and development Syahrul Tahir said at the inaugural flight of the first B-737-200C in October.

In serving international cargo destinations, Garuda is collaborating with foreign airlines such as China Airlines and Korean Air.

Garuda cargo also serves a new Jakarta-Amsterdam route every Tuesday, in cooperation with Martinair, using a B-747-200F cargo jet, Chandra said.

"The freighter, which began operating last week, will be officially inaugurated December 17," he said.

In regards to international cargo, he said Garuda plans to raise its cargo tariff for international airfreight services early next year. He refused to disclose the percentage of increase. (04)