Welcome Guest   |  Login   |   Signup
JG Logo
Thu, May 24, 2012
Archive Search

Garuda Targets $200m in Loans to Finance Aircraft
Ivan Dasa Saputra & Elisabeth Gloria | February 03, 2012

Garuda Indonesia wants more aircraft such as this one to fly from the nation’s airports in order to remain competitive. (Suara Pembaruan Photo) Garuda Indonesia wants more aircraft such as this one to fly from the nation’s airports in order to remain competitive. (Suara Pembaruan Photo)
Share This Page
0
9
0
0
Share with google+ :


Post a comment
Please login to post comment

Comments

Be the first to write your opinion!

Garuda Indonesia, the country’s flag carrier, is seeking $200 million in bank loans for financing this year as it boosts the number of aircraft it plans to purchase by more than double.

Elisa Lumbantoruan, finance director at the airline, said the funds would be used as “pre-delivery payment” for its plan to buy new aircraft in the coming years.

Garuda needs as much as $430 million to finance the purchase of the aircraft to expand its fleet, Elisa said. He neither disclosed the terms of the bank loans nor identified the lenders.

Pre-delivery payment is equivalent to a down payment to the aircraft manufacturer. Garuda is expected to use a combination of bank loans and its own cash to fund those payments.

Jakarta-based Garuda will use Rp 2.7 trillion ($302.4 million) from its cash to finance the fleet purchase. It will also use Rp 1.7 trillion from proceeds of its initial public offering last February.

“We are looking for $200 million in bank loans in the fourth quarter this year,” Elisa said after a general shareholders meeting in a cargo hold at Soekarno-Hatta International Airport in Tangerang on Friday.

The airline said that it would buy 97 additional aircraft in the next four years — more than double its plan of 36 units announced last year. The company wants to expand its network and coverage amid stiff competition in the airline industry.

Other operators such as Lion Air and AirAsia have announced plans to buy more aircraft to meet travel demand in the country.

“There is a rapid change in the market which prompted the company to boost its fleet accordingly,’’ Garuda president director Emirsyah Satar said on Friday.

Garuda will buy 20 Boeing 737-800NG aircraft, double its original plan, and 24 Airbus 330-200s, up from its initial plan of six. It will also purchase 25 narrow-bodied aircraft, compared with its original plan of five units; and 18 aircraft that carry fewer than 100 passengers, up from five.

It is sticking with its plan to buy 10 Boeing 777-300 ERs.

Emirsyah said Garuda maintained its capital spending at $5.3 billion for the next five years. “The company needs that much to boost business in the next five years,’’ he said.

“Some of the aircraft will be delivered this year,’’ Emirsyah continued, declining to say which types would be shipped. “There will be deliveries next year and that will continue until 2016.”

Garuda owns and operates 89 aircraft that serve both international and domestic routes.

It has said that it expects a 20 percent increase in the number of its passengers this year from an estimated 17 million passengers in 2011. The company had estimated that 13.5 million people traveled on its domestic routes last year. It is eyeing new routes in Asia including Taipei, Tokyo and India to compensate for a possible decline in demand from the euro zone.

Shares of Garuda closed unchanged at Rp 630 on Friday. They have risen 33 percent since the start of the year.

Additional reporting from Investor Daily