Garuda launches its first cargo jet
JAKARTA (JP): Flag carrier Garuda Indonesia launched yesterday its first cargo jet in a bid to cash in on the booming Asian airfreight business.
Syahrul Tahir, vice president for cargo planning and development, told reporters after the inaugural flight of the B- 737-200C plane at Soekarno-Hatta airport that Garuda is preempting other regional airlines who are eying the Indonesian cargo market.
Several foreign air freighters, including some from neighboring Southeast Asian nations, see Indonesia as a potential market for air cargo services, he said.
"We're not behind in this business," Syahrul reassured reporters. "Garuda has established partnerships with Korean Airlines and China Airlines to provide international air cargo services," he added.
A second B-737-200Cs jet will be added to the service in early November. They will operate scheduled services linking major cities in eastern Indonesia, including Surabaya, Denpasar, Ujungpandang, Manado, Biak and Jayapura.
"(Later on), we plan to add some regional destinations, including Kuala Lumpur," Syahrul said.
The jets have been leased from a foreign firm, but Syahrul refused to disclose the name of the leasing company or how much Garuda is paying. "I can only tell you that a jet is usually leased for $2,400 per hour."
Sources said the leasing company is a Malaysian firm.
Garuda already offers cargo services, but the goods are flown on board scheduled passenger services.
The cargo business contributes around 15 percent of Garuda's annual revenue, which reached Rp 2.37 billion ($1 million) in the first six months of 1996 and Rp 4.13 billion in 1995.
"We forecast growth rates of between 17 and 18 percent a year in cargo revenues, now that we have the jet up and running," Syahrul said.
Separately, Finance Director Subiyanto told Antara that Garuda plans to sell 25 percent of its shares when it enters the capital market by 1998.
"Garuda has been given only two years to prepare the initial public offering, instead of the five years given to other state companies," Subiyanto said.
He said that Garuda's debt-equity ratio stands at 55:45.
Garuda's total outstanding debts stand at Rp 900 billion ($384 million) because of heavy borrowings a few years ago when it placed orders for five B-737-400s and two B-747-400s.
Minister of Transportation Haryanto Dhanutirto during a hearing with the House of Representatives last month said that Garuda suffered losses of Rp 2.65 billion in the first six months of this year. In 1995, it made a profit of Rp 135.79 billion.
The airline is currently restructuring marketing, operations and its organization. In June the government agreed to inject Rp 754 million to improve Garuda's financial position. (icn)