Garuda posted net loss in 2004, first in 3 years

Garuda posted net loss in 2004, first in 3 years

Arijit Ghosh and Soraya Permatasari, Bloomberg/Jakarta

PT Garuda Indonesia, the nation's biggest airline, said it posted
a net loss in 2004, the first time in three years because of
higher costs and surging fuel prices.

Net loss for the year ended December was Rp 811.3 billion
(US$83 million), compared with Rp 2.81 billion net income in
2003, according to company documents obtained by Bloomberg News.
Sales rose to Rp 10.06 trillion from Rp 8.75 trillion, the
audited figures showed.

Jakarta-based Garuda and other Asian airlines have been
struggling with higher costs because of surging oil prices,
prompting them to impose a fuel surcharge to defray part of the
additional expenses. Global carriers may pay $83 billion for fuel
this year, 31 percent more than 2004, causing the industry to
report a record loss of $6 billion, the International Air
Transport Association, which groups 265 carriers has said.

Jet fuel rose 20 percent to $48.35 at the end of 2004 from a
year earlier, according to oil-pricing service Platts. Jet fuel
averaged $62.98 a barrel in Singapore in the first half of 2005,
29 percent higher than the average last year. The price of
aviation fuel rose to a record $76.375 a barrel on April 4.

Fuel costs account for 30 percent to 35 percent of Garuda's
total operating expenses, the state-owned company said in June.

Garuda said its costs rose to Rp 10.87 trillion last year from
Rp 8.69 trillion a year earlier, the company said. The loss from
its operations was Rp 804.9 billion last year, compared with an
operating profit of Rp 60.3 billion a year earlier, it said.

Garuda in May increased fares by an average 10 percent on
domestic flights, including that from Jakarta to Denpasar on Bali
island, one of the airline's busiest routes. On June 1, it raised
surcharges imposed on flights to countries in the Middle East to
$25 each passenger from $12. It doubled the surcharge for flights
to Beijing and Shanghai to $30 and increased the charge to
Australia from $25 to $35.

The company may report an operating loss of $10 million to $20
million this year because of surging jet fuel prices, it said in
May.

Garuda, whose management board was dismissed in March by the
government, posted a first-quarter loss of Rp 139 billion. It
earlier reported an operating loss of Rp 618 billion last year
compared with a Rp 2.8 billion operating profit in 2003, without
disclosing its net loss.