Garuda suffers losses from domestic routes

Garuda suffers losses from domestic routes

JAKARTA (JP): For the first time, the national flag carrier
Garuda Indonesia suffered losses in the first three months of
this year due to low utilization of its seat capacity on the
domestic routes, the airline's president says.

"There are many vacant seats in our domestic flights," Wage
Mulyono told reporters after swearing in two new directors of
Merpati Airlines, a subsidiary of Garuda, in a ceremony here
yesterday.

Wage, who is also Merpati's chief commissioner, inaugurated
yesterday Budiarto Subroto, 50, as commercial director to replace
Rozali, and Mulyono, 55, as technical director to replace Rafdi
Samin.

Wage said the business development in the first quarter of the
year, therefore, makes Garuda not attractive to sell its shares
both on the domestic and international capital markets.

Garuda thus far has been one of state companies that plan to
sell shares on international capital market.

Wage refused to specify the amount of Garuda's losses in the
first quarter of this year but said that the amount is not large.

Garuda currently serves 13 domestic destinations, including
Jakarta, Solo (Central Java), Yogyakarta, Surabaya (East Java),
Manado (North Sulawesi), Ujungpandang (South Sulawesi), Medan
(North Sumatra), Denpasar (Bali), Biak and Jayapura (Irian Jaya),
Banda Aceh, Balikpapan (East Kalimantan) and Batam by operating
Boeing 747-200, Boeing 737-400, Airbus 300, DC-10 and MD-11
aircraft.

Vacant

Garuda's finance director Jazid Adam said that more than 800
seats were vacant in Medan-Jakarta routes every day during the
first quarter.

Secretary General of the Indonesian Association of National
Air Carrier (Inaca) Benny Rungkat told The Jakarta Post yesterday
that serving domestic routes will be profitable only if an
airline operates small-body aircraft.

"Higher frequency is more important than a large capacity for
domestic services. Small aircraft, therefore, will be more
suitable for domestic flights," he said, adding that ideal
aircraft for domestic services include Boeing-737, DC-9, Fokker-
100, Fokker-70 and BAe 146-100.

He said that Garuda is apparently spends to much for domestic
operation because it uses wide-body aircraft.

Minister of Transportation Haryanto Dhanutirto said in a
hearing with Commission V of the House of Representatives earlier
this year that Garuda is expected to gain a profit of Rp 264.13
billion (US$122.51 million). (icn)