Garuda Projects Profitability and a Newer Fleet of Aircraft

(9/30/2006)

The Indonesian language Bisnis Indonesia reports that Garuda Indonesia will allocate US$1.6 million for rental fees to secure two new Boeing 737 NG aircraft in 2006.

The funds will be channeled from the US$52.2 million dollar cash injection recently approved by the members of the National People's Consultatative Assembly (DPR).

The four uses designated for the emergency cash injection to the national carrier are:

o	Initlal lease payments for the rental of two new B-737 NG worth US$1.6 million.
o	Repayment of US$14.7 million of short term debts totalling US$43.6 million.
o	Payments for US$17.3 million in repairs and overhaul of a projeted US$19.6 needed for six Airbus 330 aircraft owned by Garuda.
o	Allocation of US$18.9 million or a an estimated US$20 million needed to undertake repairs on the rest of Garuda's aging fleet of aircraft.

An second cash injection of US$52.5 million, allocated from the 2007 State budget, will be used next year for ongoing management restructing at Garuda, short term loan repayments, and additional repairs needed on the Airline's fleet.

Targeting a Profit in 2007

Meanwhile, the Indonesian language BisnisBali confirms that Garuda is projecting a profit of Rp. 444 billion (approximately US$48.2 million) in 2007, an impressive financial rebound from losses of Rp. 692 billion (approximately US$ 75.2 million) suffered by the Airline in 2005.

A Garuda Indonesia spokeman recently told the Indonesian Parliament that the airline expects total revenues in 2007 to reach Rp. 13,136 trillion (approximately US$1.42 billion).