The Indonesian government plans to merge PT Garuda Indonesia Tbk (IDX: GIAA) with other tourism state-owned enterprises to set up a holding company for tourism and aviation sector - Photo by the Company

JAKARTA (TheInsiderStories) – Management of PT Garuda Indonesia Tbk (IDX: GIAA) said that would suffer huge losses around US$18 million per month, if follow the upper tariff limits rule. Recently, Transportation ministry changed the lower limit tariff to 35 percent of the upper limit tariff from earlier 30 percent of the upper limit tariff.

The CEO Ari Askhara told the parliament’ VI Commission members, the losses resulting from the government’ new tariff could charge the airline because the value of the company’ loss could reach hundreds of billions of Rupiah (or the equivalent of the Break Event Point).

“As for the background of PT Citilink Indonesia, the ticket revenue is decreasing more and more. Lion Group itself does not raise prices, but the luggage price is added, so that the outside does not appear to be rising,” he added.

Askhara stated that the Garuda financial condition in 2017 slumped to $237 million because of the higher operating expenses. However, in September 2018 the management made a breakthrough and restructured the cargo business, in which the company collected several cargoes directly from China and Japan, from previously using the services of third parties.

Commenting on the financial statement issues, Askhara stated that the problem had been examined by the Financial Services Authority and had met the data needs and waited for the results to be in accordance with Financial Accounting Standards 23 because third parties were given exclusive rights and royalties.

Besides of that, the Indonesia Stock Exchange (IDX) actually continued to search for chaotic questions about the airliners financial statements dispute. IDX promised to make a decision as soon as possible while awaiting the opinion of the Indonesian Accountants Association (IAI).

“Actually, we are still waiting for IAI’ opinion. Only if we haven’t, we already have stand points in the near future. If it is indeed strange, we will (hang) but we are still waiting,” said IDX Managing Director Inarno Djajadi on Tuesday (05/21).

If a fault is found in the financial statements, the bourse authority will ask the company to re-submit its financial statements and will make a decision as soon as possible.

Written by Daniel Deha, Email: