Garuda sees continuing trend in rising losses

Garuda sees continuing trend in rising losses

Teetering on the brink of bankruptcy, national flag carrier
Garuda Indonesia saw a continued trend in operational losses in
the first five months of the year, reaching a total of Rp 445
billion.

State Minister for State Enterprises Sugiharto said before
legislators that the airline's operational losses rose each
month, starting from Rp 20.6 billion in January, Rp 65.9 billion
in February, Rp 100 billion in March and Rp 131.8 billion in May.

The losses were caused by soaring fuel prices and tough
competition, especially with the rapidly growing low cost
carriers in the domestic market.

Garuda's president director Emirsyah Satar said fuel costs had
risen from 38 U.S. cents per liter in January to 49 cents per
liter in May.

"Each 1 cent increase will bring an additional cost of $9
million per year," he added.

Garuda booked an audited net loss of Rp 861.21 billion last
year. As of March, the company's total debts stood at some $826.5
million.

"We are already starting negotiations for a rescheduling with
ECA," Emirsyah said, referring to Garuda's largest group
creditor, the European Credit Agencies, to which the airline owes
more than $500 million. -- JP