Garuda to resume flights to Fukuoka in July
JAKARTA (JP): National flagship carrier PT Garuda Indonesia will resume its international flights to Fukuoka early in July to take advantage of the growing demand for travel to this Japanese city.
Garuda president Abdulgani said here on Wednesday that the resumption of flights to Fukuoka would bring the airline's total of Japanese destinations to four cities.
"In its initial operation, we will start flying three times a week," Abdulgani said following a signing of a partnership agreement between the company and PT IBM Indonesia.
Under the partnership agreement signed by Garuda's president and IBM president Betti S. Alisjahbana, Garuda will procure its IT infrastructure, including hardware, software and applications, from IBM.
Garuda flies daily to Tokyo and four times a week to Osaka and Nagoya.
Last year, the company resumed its international flights to Seoul.
Garuda director of commerce Bachrul Hakim said the resumption of the flights, which were discontinued in 1997, topped the company's priorities in offering international service.
"We won't open new routes, only to destinations we've closed," Bachrul said.
He earlier said that in addition to Fukuoka, the company was also studying the possibility of resuming its international flights to several destinations in China.
Garuda halted its services to 17 international destinations, including Seoul, Taipei, Honolulu, Los Angeles, Paris, Rome, Zurich and Saigon late in 1997, due to the impact of the economic crisis in the country.
Abdulgani said the company would not add any of its new fleet to service the new route.
"We'll optimize our existing fleet as we focus to create efficient management in the company this year, rather than conducting expansion," he said.
Garuda operates 44 aircraft, comprising 26 Boeing 737s, seven Boeing 747s, six A-330s and five DC-10s.
Abdulgani also said the flight resumption was also a maneuver to boost foreign exchange revenue from international flights.
He said the strategy would secure more foreign exchange from international transactions, which was crucial in its move to neutralize the devastating impact of the incessant fluctuation of the rupiah to the U.S. dollar.
Garuda suffered a 90 percent drop in net profits last year to Rp 53.25 billion due to extensive foreign exchange losses which reached Rp 598.41 billion following the plunge of the rupiah's value to the greenback.
Foreign exchange losses, mainly due to the sharp depreciation of the rupiah, ate up a larger part of its net operating revenue, which rose by 75 percent to Rp 873.42 billion in 2000 from Rp 231.83 billion in 1999.
Separately, Garuda executive vice president for financial affairs Emirsyah Satar said the airline expected to complete the restructuring of its massive US$1.6 debt in June.
"About 90 percent of the company's restructuring proposal has been approved by the creditors," Emirsyah said.
Garuda's total debts reached $1.6 billion. It owes about $610 million to the European Credit Agency, a consortium of foreign creditors from Germany, France and Britain. The government also extended a loan to Garuda, which stands at $572.2 million, while the remaining $460 million came from more than 100 local and foreign creditors.
Emirsyah said with the debt restructuring plan, Garuda's debt plus interest payment due this year would amount to about $129 million.
"But the final decision (of the restructuring) doesn't belong to us. All we can do now is just push them (the creditors) forward with the plan," Emirsyah said, adding that in principle, the creditors had approved the scheme.
According to the company's financial report, Garuda's long- term liabilities skyrocketed to Rp 3.32 trillion last year from only Rp 25.97 billion in 1999. (03)