Air Transport World

Garuda switching emphasis to international markets. (Garuda Indonesian Airways)

Garuda switching emphasis to international markets

It is said that timing is the essence of everything, be it success or failure, and Garuda Indonesia seems destined to prove the point.

Indonesia's national flag carrier, which appropriately enough got its start in the late 1940s just in time to be shut down by the country's battle for independence, has seen many changes over the years.

Take last year's profit/loss figures for example. In early 1986, R.A.J. Lumenta, Garuda's relatively new president, predicted a $16.8 million loss. By mid-year, however, the cost of fuel had dropped significantly and Lumenta was happily looking to a much lower potential loss, perhaps break even. Then late in the year came another in a long series of devastating, unpredictable devaluations of the Rupiah, and Garuda ended the year with a $13 million loss, $10 million of it due to the devaluation. Still, it was good compared to a $31 million loss the year before and $70 million in 1984.

At the beginning of 1987 Lumenta was predicting relatively smooth sailing for the airline, albeit with a projected loss of $30 million, due primarily to high interest rates in foreign currencies. Passenger figures and revenues were up across the board for 1986 over 1985: 5.5 million scheduled passengers boarded in 1986 versus 4.5 million the previous year; 111,197 versus 79,568 on the annual Hajj charters. Revenues were up to around $820 million over 1985's $745 million.

How could he predict that world oil prices would continue to seesaw, causing ever more economic problems for Indonesia, or that Garuda's passenger load factor would drop to below 50% in the first quarter of 1987, also due to the flagging economy both internally and within several of the carrier's major international markets?

And how could he have predicted that a Garuda McDonnell Douglas DC-9 would go down in a blinding thunderstorm in April, causing a loss in lives and public image? Or that in May a vintage motorcycle he was driving would collide with a bus, putting the Garuda president, along with his critical program for expanding international services, out of commission for a whole month? The injuries have healed, but the time is lost forever.

Lumenta himself has been both victim and benefitter of timing. He came to Garuda in 1984 when the airline was suffering from a public image of being an overly sparse, overly expensive mode of transportation. His vision of a new image and "quality service' was welcome.

The airline had also just passed through a period when natural and political phenomena --including the unforeseen increase in fuel costs that killed so many airline hopes in the early 1980s, and a flattening out of a long, spectacular growth period--had left Garuda with a big debt and aircraft overcapacity. …

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