National flag carrier remains in red, yet posts rare profit for July
National flag carrier remains in red, yet posts rare profit for July
Urip Hudiono, The Jakarta Post, Jakarta
Despite its recent journey through some financial turbulence that
included soaring oil prices and a weakening rupiah, national flag
carrier PT Garuda Indonesia may be looking at clearer skies up
ahead as it managed to book its first profit for the year in
July.
Garuda's president director Emirsyah Satar announced during a
media conference on Friday that the airline had recorded a
monthly yield of Rp 87 billion (US$8.7 million) in July, after
six straight months of losses to begin 2005.
Despite July's profit however, Garuda is still in the red
overall, as its operational losses during the year's first seven
months still stood at Rp 421 billion, higher than the Rp 269
billion during the same period last year.
Its revenues in July, meanwhile, stood at Rp 1.02 trillion, as
compared to Rp 916 billion during the same month last year.
"July's profit was our first ever for the year," he said,
adding however, that it was also higher than the Rp 29 billion in
profits that Garuda had managed to book in July last year.
"Our target for this year is to be able to turn our current
operating losses into profits, or at least reach a break-even
point."
Garuda is targeting as much as $1.05 billion in total revenues
for this year, Emirsyah added, from the $650 million it has
booked so far.
Emirsyah attributed the profit to several factors; a rise in
its seat load factor from 65 percent in March to 74 percent in
July and its passenger yield from 6 U.S. cents to 7 U.S. cents in
the same period.
The country's largest airline also managed to optimize the
utilization of its planes, being able to keep them up in the sky
19 minutes longer from a previous nine hours and 19 minutes from
March to July, and improving its on-time performance from 78.9
percent to 88.37 percent in the same period.
State Minister of State Enterprises Sugiharto replaced
Garuda's entire board of directors in March.
Garuda posted a net loss of Rp 811.3 billion last year, its
first loss since 1998, and way off 2003's Rp 2.81 billion net
profit, due to soaring oil prices and fierce competition from
more and more low-budget carriers operating in the country and
region.
The situation could remain difficult for Garuda with the
rupiah's recent slump against the U.S. dollar, which is used for
some 60 percent of its operational payments.
The price of aviation fuel, which makes up about 30 percent of
Garuda's operational costs and adds $9 million for every 1 U.S.
cent price increase, may not ease up in the near future.
Garuda's finance director Alex M.T. Maneklaran was, however,
optimistic about the airline's financial condition for the
remainder of the year, emphasizing that the second half of the
year is usually the peak season for the airline business.
To further keep Garuda's financial condition on the upswing,
Emirsyah also mentioned that the company was continuing to
service another $46 million of its debts as of July, and will
soon propose a debt restructuring scheme for its $816 million
remaining debt with its creditors, including the European Credit
Agencies.