TEMPO.CO, Jakarta - State-owned Enterprise Minister Dahlan Iskan has instructed state airlines PT Garuda Indonesia to convene a special meeting of shareholders to discuss its swelling losses.
"Garuda has suffered great losses. I have asked the management to report to me on Monday (September 1) on how the management will safeguard the companys financial problem," the minister said on Thursday as quoted by Antara News.
Dahlan stated that the state-owned airlines company was suffering from difficult financial issues, so that its management should take a concrete step.
In the first semester of this year, Garuda had posted a net loss of US$211.7 million or about Rp2.3 trillion, swelling from US$10.7 million in 2013.
The comprehensive losses that could be attributed to the parent entity owner stood at US$200.38 million, up drastically from previous US$11.39 million.
One of the causes of Garuda's worsening performance is currency exchange rate difference, which shot up to US$12.86 million compared with US$1.41 million in the first semester of 2013.
In addition, corporate burden also jumped up by 14.75 percent to US$1.9 billion from US$1.7 billion.
Earlier, Garuda Indonesia had sought additional chartered flights to several cities in China, hoping to start by early 2015.
The move was aimed at reaping maximum benefits from the large Chinese market, Beijing-based Garuda Indonesia manager Asa Perkasa said on August 14, 2014.
"Right now Garuda Indonesia is serving Beijing-Jakarta-Bali, Shanghai-Jakarta, and Guang Zhou-Jakarta flight routes. Even the local authorities have allowed (Garuda Indonesia) to fly to Hang Zhou and Chengdu," he noted.
To take maximum advantage of the Chinese market, Garuda Indonesia and several local companies had been planning to open chartered flights from and to the five Chinese cities--Beijing, Xian, Harbin, Shenyang, and Dalian, he said.
He stated that political situations in Thailand and Vietnam and the crash of Malaysia Airlines plane had led to tough price competition.
"The airline companies of the three countries have reduced their flight tickets significantly to encourage tourists, particularly those from China, to continue to visit the countries," he revealed.
He said every agent and airlines company in China were selling tour packages to Indonesia, particularly Bali, as the major tourist destination.
"This is a positive opportunity we must take advantage of maximally," he remarked.
As a national flag carrier, Garuda Indonesia was unlikely to compete with foreign airlines companies by offering large price discounts, he added.
ANTARA | INE