Garuda says flight cuts won't hurt revenue

Fitri Wulandari, The Jakarta Post, Jakarta

National flag carrier Garuda said that the decision to temporarily reduce and cease flights, mainly on international routes, would have little impact on the company's 2002 revenue as it took effect in the latter part of the year.

"It will have an impact on Garuda's revenue this year. But as the reduction of flights became effective on Nov. 15, the impact will not be too significant," Emirsyah Satar, Garuda's finance director told The Jakarta Post on Tuesday.

Emir said that this year's revenue will be similar to last year's, at Rp 10.8 trillion (US$ 1.2 billion).

Garuda bore the brunt of the bombing incident on the tourist haven of Bali on Oct. 12 that killed at least 190 people, mostly overseas tourists. Its passenger levels have dropped by 40 percent, while 60 percent to 70 percent of Garuda's international flights originate from Denpasar, Bali.

Garuda's international routes that have been either temporarily reduced or withdrawn include flights to Australia, Japan, South Korea, London and Frankfurt. Flights to Amsterdam will be temporarily halted from Jan. 22 through Feb. 20.

These routes service Garuda's three largest markets.

Several domestic routes that serve Bali and other cities have had their flight frequency temporarily reduced or are served by smaller aircraft.

"(The policy) will reduce operating and other variable costs, which, in turn, will help stem the hemorrhaging cash flow," Emir added.

Garuda also said that none of its 51 aircraft was idle as the company had redeployed some to profitable routes as part of its contingency plan after the Bali bombing.

The aircraft are used to strengthen its fleet ahead of the year-end holiday. For the Idul Fitri holiday, Christmas and New Year, Garuda has made available 30,188 seats on flights to 10 cities, both domestic and regional. Among the cities are Yogyakarta, Solo, Denpasar, Batam, Singapore, Hong Kong and Guangzhou.

With the decision, Garuda has also cut costs to provide services for the coming Haj season early next year. Its A-330 aircraft, each with 293 seats, and Boeing 747-400, with 124, which usually serve Europe, Australia and Japan, will be used to transport Haj pilgrims.

As part of its contingency plans, Garuda is studying the possibility of opening up new routes in regions with potential such as the Middle East (Dubai and Kuwait) and within Asia (including Beijing, India and Srilanka).