Garuda to cut operating costs

Garuda to cut operating costs

JAKARTA (JP): State-owned airline Garuda Indonesia is planning
to cut its operating costs by 20 percent this year.

Garuda finance director Achmad Subianto said Thursday the cuts
would affect accommodation, catering and transportation for
crews.

Garuda expects to gain Rp 4.8 trillion in revenue and at least
Rp 300 billion in profit this year.

Garuda president Soepandi said his company lost Rp 87.44
billion last year from operations, down from a Rp 342.79 billion
loss in 1995.

Soepandi said that, if proceeds from the sale of assets of Rp
212.09 billion were included, Garuda had booked a Rp 124.65
billion profit.

"We sold our assets like spare parts for DC-9 and F-28
aircraft which are not used by Garuda anymore," he said. He
refused to give more details on asset sales.

He said Garuda had suffered losses in 1995 and 1996 because of
rising fuel prices and an increasing number of jet overhauls.
Reports on cholera in Bali in late 1995 caused passenger traffic
from Japan to drop 30 percent last year.

Subianto said that Garuda planned to sell several of its
hotels.

"We will sell the hotels in Lombok, Sanur (Bali) and Bandung
(West Java). We have short-listed 35 firms from about 50
companies which have proposed to buy the hotels," he said, adding
that Garuda would hold an open tender in February or March to
select buyers.

The three hotels are managed by its hotel subsidiary, PT
Aerowisata, which also has catering and transportation services.

New service

Soepandi said that Garuda began a new service yesterday to
link Jakarta and Amman, Jordan, as part of its expansion program.

"The twice-weekly flights will use MD-11 jets as the part of
the service to London," he said.

The new route, Denpasar-Jakarta-Bangkok-Amman-London, departs
every Friday and Sunday.

Garuda decided to launch the service to capture the rising
number of people traveling to the Middle East, especially those
on pilgrimage to Jerusalem.

Garuda serves three other cities in the Middle East: Riyadh
(thrice weekly), Jeddah (thrice weekly) and Dahran (weekly).

For Middle East destinations, Garuda competes with Gulf Air
(United Arab Emirates) operating B-767-300s, Emirates Air (United
Arab Emirates) operating A-300s and Kuwait Airways (Kuwait)
operating A-310s. (icn)