Its finance director, Elisa Lumbantoruan, said here on Friday although oil prices are predicted to continue to rise the company would not always follow with fare hikes.
"We are indeed following the development of the world crude price but we will not always follow it with a fare hike," she said.
Elisa said if the crude price continued to rise the decision to be made by the company would only be effective for the next three or four months or even three or four years.
"So if a decision is made this month due to the hike its effect would only be effective during the next two months," she said.
Elisa said while fluctuations in the world crude price were temporary - for example, reaching US$120 per barrel at one time but later declining to US$90 per barrel - , the company probably would not adjust the fare right away but would first only change the allocation of passenger seats.
"In Garuda we apply a system of "linear distribution" between the highest and lowest fares and generally the biggest distribution is on the middle price," she said.
The hike in the oil price, she said, could affect positively in terms of revenue due to price adjustment but negatively it could increase the company`s burden.
"We have had experience about oil price hikes when in 2008 it was still between US$30 and US$40 per barrel but now already reached US$140 per barrel. Last year in January 2011 the price was still around US$60 per barrel and in February 2011 it jumped to US$100 per barrel. But the company could adjust quickly," she said. (*)
Editor: Kunto Wibisono
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