Close
Bali Discovery Tours: Homepage
Bali Hotels, Bali Villas and Bali News from balidiscovery.com
Home Bali Contact Bali Practicalities Bali News Bali Services Bali Transportation Bali Sports Bali Excursions Bali Villas Bali Hotels
Home · News · Garuda's Gloomy Start to 2006
Bali Hotels, Bali Villas and Bali News from balidiscovery.com
Bali Hotels
Bali Villas
Special Deals!
Packages
MICE Handling
Bali Excursions
Culinary - Dining
Guided Tour
Bali Spas
Bali Sports
Diving
Golf
Bali Transportation
Car Rental - Selft Drive
Private Jet Charter
Bali News
Bali Services
Bali Practicalities
Bali Contact
Bali Career
Home
 
Bali Update
Subscribe to our free weekly newsletter!
 
PATA header
PATA Gold Award 2007
Bali Update
PATA Gold Award Winner 2007
 
Bali Contact
Bali Discovery Tours
Komplek Pertokoan
Sanur Raya No. 27
Jl. By Pass Ngurah Rai,
Sanur, Bali, Indonesia

Tel:
++62 361 286 283

Fax:
++62 361 286 284

U.S.A. Fax:(toll free)
1-800-506-8633

U.K. Fax:
++44-20-7000-1235

Australian Fax:
++61-2-94750419

24h:
++62 812 3819724

Bali Discovery

SITE PATA ASITA
Bali News

Garuda's Gloomy Start to 2006

Financial Default, Privatization and Foreign Ownership All Looming on the Horizon for the National Carrier in 2006.


Bali News: Garuda's Gloomy Start to 2006
Click Image to Enlarge

(1/2/2006)

Once ranking as the largest air carrier in the Southern hemisphere, the fortunes of national air carrier Garuda Indonesia have been in a state of steady decline in recent years. Closing offices and routes to Europe and the United States, Garuda's international reach and fleet have shrunk while the airline's executives have watched its domination of Indonesia's domestic route network evaporate in the face of a whole league of low-cost domestic air competitors.

On the Verge of Financial Default?

Just when it appeared things could not be worse for the Airline, Reuters' New Service broke the story that Garuda will begin 2006 by defaulting on a US$55 million debt payment that fell due at the end of 2005.

As reported on balidiscovery.com in [ Garuda Delays Debt Repayments to Creditors], the US$55 million repayment is due to the European Credit Agencies (ECA) and forms part of an overall debt of US$150 million and Euro 800 million owed by the Airline to the ECA.

The Airline has been struggling in the face of declining revenues to restructure its debt and rationalize its operations. In an official statement from Garuda on December 29, 2005, Garuda said it "has made significant progress in developing the basis for presenting a restructuring plan" but "additional work is required to reconcile complex inter-creditor and governmental issues."

The decision to default on the debt repayment has been formally reported to the Government who have reportedly endorsed the decision to forgo principal repayments while continuing to pay interest on its loans.

Emirsyah Satar, the President Director of Garuda has blamed rising fuel costs, intense competition, security concerns, a declining Indonesian Rupiah and the October 1, 2005 bombing in Bali as all having an aggregate deleterious effect on his company's financial status.

Garuda For Sale?

Projected to post a loss for 2005 of US$70 million following a loss of US$81 million in 2004, Garuda's financial options appear to be few with the Minister for State Enterprises, Sugiharto, signaling that plans to take the state-owned airline public in 2009 may now have to be accelerated in order to save the carrier.

No Longer the National Flag Carrier?

Comments by Indonesia's Vice-President Jusuf Kalla suggest that Garuda may be losing its privileged position as the official national airline of Indonesia.

Kalla told the press that Garuda must be viewed as a business and its potential sale even to foreign interests can no longer be considered as somehow selling the nation to outsiders. Suggesting that such thinking is outdated, the Vice-President explained how many carriers - including KLM, Malaysia Airlines, New Zealand Airlines, and Qantas have large shares of foreign ownership and control.

Separately, a spokesman for the Ministry of State Owned Enterprises suggested that there were already three major foreign airlines who have expressed an interest in buying into Garuda. The Government is reportedly in negotiations with the three to determine which among the them is best suited to help Garuda return to profitability while regaining its international reputation and route network.

A Dissenting Voice

Meanwhile, a group, calling itself the People in Support of Indonesia's Commercial Aviation (PAUKI), is opposing plans to sell the Airline to foreign interests, labeling such a move as "selling the Country." An advisor to PAUKI and the former President Director of Garuda, Mohammad Soeparno, has criticized past moves that allowed foreign investors to buy shares in existing domestic carriers as contributing to Garuda's current financial woes. Soeparno called on the Government to give a fresh cash injection to Garuda allowing the Company to return to health and be ready to compete in the increasingly liberalized world of commercial aviation.

Soeparno told the Indonesian-language Bisnis Indonesia that with proper attention from the Government and regulations to protect the State-owned carrier Garuda could return to its "glory days of 1984-1992."


© Bali Discovery Tours. Articles may be quoted and reproduced if attributed to http://www.balidiscovery.com.


 
UBUD WRITERS & READERS FESTIVAL
 
Bali News by Bali Update
Subscribe to the Bali Update
Receive the latest news from Bali by email!



Our [Privacy Statement] explains how we handle the data you are providing.

 
Bali News by Bali Update
Explore the Archive of the Bali Update
Find related articles in our news archive!




or try to use Google Search :

Home · Bali Hotels · Bali Villas · Bali Excursions · Bali Sports · Bali News · Site Map · RSS

Bali News: More News
Harambee, Buana! Harambee!
Hat-trick Win for Kenyan Kennedy Kiproo Lilan on His 3rd Win of BII Maybank Bali Marathon
(9/14/2014)
Holiday of No Return
Suicide Suspected in Death of 31-Year-Old Australian at a Kuta Hotel
(9/13/2014)
Roller Coaster Effect
Bali Hindu Support a Mass Transit Rail System that Honors Local Sensitivities
(9/13/2014)
Climb Every Other Mountain
Bali's Mount Agung Closed to Hikers Until November 21, 2014
(9/13/2014)
We Have a Search Warrant!
Prosecutors Raid Bali Airport Offices Seeking Evidence in Ongoing Corruption Investigation
(9/12/2014)
Bali & Beyond Travel Fair 2015
2nd Bali and Beyond Travel Fair Returns to Bali June 10-14, 2015
(9/12/2014)
Have Lunch with Bali's Best Chefs
Bali Culinary Professionals September Lunch - a Bavarian Affair at Discovery Kartika Plaza Hotel on Saturday, September 27, 2014
(9/12/2014)
Thai-Style Hospitality Comes to Bali
Centara Hotel and Resorts Opens 14-Villa Property at Nusa Dua, Bali
(9/12/2014)
Service Included
Airport Service Charge to be Included in Cost of Domestic Tickets Traveling form Bali's Airport
(9/12/2014)
Waldorf . . . .Make it a Double
Bali to Be Home to Two Waldorf Astorias
(9/12/2014)
Monumental Exports
29.09% drop in Exported Wooden Statues from Bali in January-July 2014
(9/12/2014)
TV Dinners
CNNgo Names Six 'Must Eat' Dishes for a Balinese Holiday
(9/13/2014)
All [News]!
 
Tourism and Transport Tourism Agents