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Garuda Issues a Profit Warning

National Carrier Says Recent Bali Bombing Will Side-Track Current Profitiability Drive.

(10/17/2005) Following the most recent Bali bombing, Garuda Indonesia's management have become increasingly pessimistic that they will manage to bring the airline to a break even point in the current operating year. At best, according to inside observers at the Airline, losses for 2005 may come in at something less than the Rp. 811 billion (approximately US$79.1 million) recorded in 2004.

Quoted in the Indonesian-language daily Kompas, the Airline's Financial Director Alex Maneklaran said, "After the Bali bombing, I feel the break even point target will be difficult to achieve. At the most, we will work to hold losses at less than those of the previous year."

Speaking in Jakarta on October 10, 2005, Maneklaran said that after the October 1st bombing in Bali Garuda saw a 20% cancellation rate of Japanese and a 15% cancellation rate of Australian travelers booked to holiday in Bali. "We are concerned that fears by Japanese and Australian tourists will persist through the end of the year. In fact, it is precisely the end of the year when peak passenger loads are achieved," he added.

Preliminary operating figures for August indicated that Garuda managed to book an operating profit of Rp. 25 billion (approximately US$2.44 million) against revenues of Rp. 860 billion (approximately US$83.9 million).