Five domestic airlines plan joint operation<\/p>\n
JAKARTA (JP): Indonesia's five operating commercial airlines
\nannounced yesterday they plan to combine their resources and
\nunite their domestic operations to survive the deepening economic
\ncrisis.<\/p>\n
The chairman of the Indonesian National Air Carriers
\nAssociation, Soelarto Hadisumarto, said the association proposed
\nthe plan to Minister of Communications Giri Suseno Hadihardjono
\nduring a meeting yesterday.<\/p>\n
\"We are going to work together -- all the existing airlines --
\nthrough an operation similar to a pooling system,\" Soelarto told
\nreporters after the meeting.<\/p>\n
\"The aim is simply to survive,\" he added.<\/p>\n
Soelarto said the scheme would be implemented soon, as all the
\nairlines had approved the plan.<\/p>\n
\"If it can start this month, why not?\"<\/p>\n
There used to be six commercial airlines in the country until
\nlast week when Sempati Air stopped operating due to crippling
\nfinancial hardships.<\/p>\n
Sempati Air's shareholders include former president Soeharto's
\nson youngest Hutomo Mandala Putra (15 percent) and long-term pal
\nMohammad \"Bob\" Hasan (20 percent).<\/p>\n
The five remaining air carriers are state owned Garuda
\nIndonesia, Garuda's subsidiary Merpati Nusantara, Bouraq
\nAirlines, Mandala Airlines and Dirgantara Air Service.<\/p>\n
Soelarto said the five airlines would form a consortium which
\nwould share the revenue of their operations.<\/p>\n
The consortium would combine the fleets of the airlines, and
\nallocate the domestic routes to the carriers.<\/p>\n
A code-sharing system would be applied so that tickets could
\nbe sold at uniform prices and with the same incentives, he said.<\/p>\n
The domestic air carriers have been in dire straits for months
\nas the crisis continued to worsen this year.<\/p>\n
Many analysts believe all the national private airlines will
\ncollapse soon if the Indonesian currency does not strengthen and
\nthe government does not help them.<\/p>\n
Their operating costs are mainly in dollars, including
\naircraft leasing and fuel costs.<\/p>\n
Unaffordable<\/p>\n
The rupiah's 80 percent depreciation against the U.S. dollar
\nsince last July has made the jet leasing payments of their
\naircraft unaffordable.<\/p>\n
At the same time, flights' load factors have slumped
\ndrastically, following people's declining purchasing power.<\/p>\n
The airlines have had to return their aircraft and they are
\nnow burdened with matured leasing payments they could not pay.<\/p>\n
Soelarto said the airlines' executives expressed concerns over
\nthe rupiah's value against the dollar, which has continued to
\nweaken in the last few days.<\/p>\n
Yesterday the rupiah closed at 14,000 to the dollar, compared
\nto around 2,500 last June.<\/p>\n
This week, State Minister of the Empowerment of State
\nEnterprises Tanri Abeng said Garuda's total foreign debt stood at
\nUS$200 million, half of which was due to be repaid this year.<\/p>\n
Tanri admitted \"Garuda is in critical condition, so
\nrestructuring both on the management and financial sides is a
\nmatter of great urgency.\"<\/p>\n
Tanri said Garuda would have a new president by Monday.<\/p>\n
After being pressured by its employees, Garuda announced this
\nweek that it would sever cooperation with companies linked to
\nSoeharto and return leased aircraft to ensure its survival. (das)<\/p>",
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