``Garuda is currently re-evaluating the European routes. We may reduce the existing European flights or even stop flying the routes at all,'' Garuda spokesman Pujobroto was quoted as saying.

Amid its increasing financial problems, Garuda has already stopped flying to Madrid, Munich, Vienna, Zurich and Rome and now serves only four European routes -- Paris, London, Frankfurt and Amsterdam.

Pujobroto said the airline had embarked on a code-sharing cooperation agreement with Swissair and Lauda Air to serve the Zurich and Vienna routes.

He said Garuda was considering letting Dutch flag carrier KLM Royal Dutch Airlines NV fly some Garuda routes through a code-sharing pact. Garuda already cooperates closely with KLM in management, technology, crew training andmaintenance.

The European cost-cutting effort reflects a squeeze on Garuda due to Indonesia's economic crisis and the collapse of the rupiah, which has dived more than 80 per cent against the dollar. Most of the airline's revenues are in rupiah while the bulk of its costs are in dollars.

Pujobroto was quoted as saying long-haul European routes were very costly to maintain because of the rupiah's fall.

Garuda officials were not immediately available to comment on the report.State enterprises minister Tanri Abeng said last month that Garuda had $200 million in foreign debts and that Garuda aircraft overseas could be confiscated unless the company restructured and improved its performance.

Garuda has said it plans to return leased aircraft to cut its fleet and reduce costs. The airline currently operates 52 aircraft, the Jakarta Post said, of which 24 are leased from foreign firms.

The plan did not forecast how much the airline would earn in the current fiscal year but it projected a net profit of 446million in the last six months starting from September when the rehabilitation programme is expected to begin.

The plan, which assumes PAL will be able to dispose of 40 of its planes and retrench 60 per cent of its employees by September, has projected net revenues of 21.601 billion pesos in the fiscal year ending March 31, 2000.

PAL has yet to disclose its first quarter financial position ended June 30. The financial woes of the airline worsened after more than 600 of its pilots struck on June 5. PAL has fired all of the striking pilots, as well as about 5,000 of its 13,500 ground and cabin crew, late last month.

The airline, which has debts worth $2.0 billion, was forced to seek debt relief from the Securities and Exchange Commission.