Garuda to resume flights to Fukuoka in July
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)