Garuda launches its first cargo jet

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)