Garuda losses drop by 75% to $36.8m in 1996

JAKARTA (JP): State-owned air carrier Garuda Indonesia reduced its losses last year by more than 75 percent to Rp 87.44 billion (US$36.8 million), down from Rp 342.79 in 1995, Minister of Transportation Haryanto Dhanutirto said yesterday.

The minister said Garuda was expected to make Rp 300 billion in profit this year.

"If Garuda turns a profit this year, the company is expected to realize plans for a public float of shares in the following year," he said following a meeting with President Soeharto.

Haryanto's remarks, however, are not consistent with previous statements.

In a House of Representative hearing last September, Haryanto said Garuda made a profit of around Rp 135.79 billion in 1995 and was expected to make a Rp 154.72 billion profit this year.

Though confused, House members were forced to believe Garuda's president Soepandi when he told a hearing early last year the company, in the first nine months of 1995 alone, made a profit of Rp 18.8 billion.

The minister told The Jakarta Post that the difference in the figures occurred because those disclosed to the House members were based on unaudited financial reports.

Garuda has been burdened with hundreds of millions of dollars of liabilities since the late 1980s.

The airline is currently restructuring its marketing, operations and organization in order to revitalize its business.

"The government has injected Rp 1.7 trillion to improve the company's financial performance," Haryanto said yesterday.

"Garuda still suffered from losses due to and inability to meets sales targets, and because of the high costs of its debt."

He gave no further details.

Garuda currently operates three Boeing B-747-400 jets, six Boeing B-747-200s, eight B-737-300s, seven B-737-400s, 10 Airbus A-300-600s, nine A-300-B4s, six MD-11s and six DC-10s.

As part of financial restructuring, Garuda plans to sell its hotel subsidiary Aerowisata, which manages nine hotels in major tourist destination areas and runs catering and transportation services.

Hutomo Mandala Putra, Sudwikatmono and Arifin Panigoro are among those interested in buying Aerowisata hotels in Bandung (West Java), Lombok (West Nusa Tenggara) and Sanur (Bali). The three hotels are owned by Garuda.

Haryanto said recently Garuda planned to sell up to 70 percent of its shares in Aerowisata to state-owned airport operator PT Angkasa Pura II.

The minister said yesterday most of the 17 state enterprises overseen by his ministry increased profits this year. The combined profit and revenue of the 17 firms reached Rp 814 billion and Rp 7.99 trillion, respectively.

"The total profit increased by 245 percent from Rp 332.11 billion in 1995," he said. (icn)