Minister slams Garuda over losses
JAKARTA (JP): Minister of Transportation Haryanto Dhanutirto slammed yesterday state-owned air carrier Garuda Indonesia for its recent huge losses and doubted the company would reach its profit target of Rp 300 billion this year.
He said Garuda had become a "parasite" with total losses reaching Rp 122.8 billion (approximately US$42.34 million) in the first half of this year.
"We have to lower Garuda's estimated profit this year to Rp 300 billion from Rp 460 billion," Haryanto told members of the House of Representatives in a hearing yesterday.
Haryanto saw the development as ironic as Garuda was originally projected to be one of the most profitable companies under his ministry's supervision.
"Garuda must realize this situation and I would like to support the national flag carrier in its efforts to recover," he added.
He did not say how or why Garuda suffered such big losses.
"The government has injected $754 million to improve the company's financial performance. It's not a small amount, but Garuda still suffered losses due to its inability to control its high costs," the minister said.
The airline also suffered an operational loss of Rp 87.44 billion last year, as against total losses of Rp 342 billion in 1995. But Rp 212.09 billion in revenue from assets (aircraft and spare parts sales) improved its bottom line last year with a profit of Rp 124.65 billion.
Garuda's president, Soepandi, who failed to appear at yesterday's hearing, said earlier that losses last year and in previous years were caused mostly by rising fuel prices and jet overhaul costs.
Haryanto reiterated yesterday that Garuda had to focus on its core business and shed some of its subsidiaries.
Merpati
The airline has subsidiaries and affiliated firms which operate hotels, catering, travel and transportation services. Garuda is currently in the process of selling two hotels in Lombok, West Nusa Tenggara, and Sanur, Bali, which are owned and run by its subsidiary PT Aerowisata.
While criticizing Garuda, Haryanto said that money-losing Merpati Nusantara Airlines was expected to break even this year after splitting away from Garuda last April.
Nonetheless, he said yesterday the company still posted a loss of Rp 40.86 billion in the first half this year.
Merpati has been hurt by a number of unprofitable routes as well as inefficiency due to its wide range of aircraft types.
Merpati's losses dropped slightly to Rp 130 billion in 1996 from Rp 133 billion in 1995. The company is also burdened with some Rp 600 billion in debts which it expects to be converted into new government equity shares.
Haryanto said yesterday that in addition to Garuda and Merpati, there were four other firms under his office's supervision which suffered losses in the January to June period this year.
He said public city bus operator Perum PPD suffered a Rp 7.15 billion loss, PT Varuna Tirta Prakasya Rp 322 million, PT Djakarta Lloyd Rp 1.85 billion and dredging company PT Pengerukan Indonesia Rp 1.4 billion.
"The combined profits of the 18 state transportation enterprises reached Rp 173.27 billion in the first half of 1997, much lower than Rp 492.73 billion originally targeted by the government," he said.
He estimated their total profit for the whole year at Rp 1.08 trillion, up from Rp 807 billion in 1996.
Among the firms making a profit in this year's first half were railway company Perumka (Rp 5.94 billion), bus operator Perum Damri (Rp 4.38 billion), ferry operator PT ASDP (Rp 5.69 billion), airport management firms PT Angkasa Pura I (Rp 53.03 billion) and Angkasa Pura II (Rp 69.09 billion).
PT Pelabuhan Indonesia II, which manages Tanjung Priok seaport in Jakarta and several other ports in West Java and South Sumatra, netted the biggest profit of Rp 106.36 billion in the first half. (icn)