Garuda questions government's plan to deal with SIA<\/p>\n
JAKARTA (JP): State-owned flag carrier Garuda Indonesia
\nquestioned on Tuesday the government's plan to invite Singapore
\nAirlines (SIA) to help manage the airline operator.<\/p>\n
\"We need clarification from the government on the matter. Is
\nit really necessary to involve Singapore Airlines now? I don't
\nknow,\" Garuda's vice president of commerce Bachrul Hakim said.<\/p>\n
He said the existing management was \"quite happy\" with its own
\nappointed advisors, Lufthansa Consulting AG and Deutsche Bank.<\/p>\n
\"As far we are concerned, Garuda has already made significant
\nimprovements under the direction of our two consultants and we
\nare happy about it,\" he told a media briefing on Garuda's plan
\nfor haj transportation in the year 2000.<\/p>\n
Garuda, in cooperation with Saudi Airlines, will provide
\ntransportation for no less than 173,459 Indonesians who plan to
\ngo on the pilgrimage during the haj period from February to
\nApril.<\/p>\n
Bachrul admitted that President Abdurrahman Wahid had
\ninformally discussed the matter with a Garuda executive, but he
\nsaid no follow-up talks had been made since then.<\/p>\n
Bachrul declined to say whether Garuda would reject the
\ngovernment's initiative.<\/p>\n
Coordinating Minister for Economy and Finance Kwik Kian Gie
\nsaid on Monday the government had held preliminary talks with
\nSingapore Airlines on the possibility of the airline managing
\nGaruda or the other state-owned carrier Merpati Nusantara
\nAirlines.<\/p>\n
Kwik said the agreement could also include the possibility of
\nSingapore Airlines acquiring an equity stake in Garuda or
\nMerpati.<\/p>\n
Bachrul said Garuda had performed better this year thanks to
\nthe advice it received from Lufthansa Consulting AG and Deutsche
\nBank, which were appointed in mid-1998 as part of Garuda's
\ncorporate and debt restructuring programs.<\/p>\n
Lufthansa Consulting is helping reengineer Garuda's commercial
\nand operational aspects, while Deutsche Bank is acting as its
\nfinancial advisor.<\/p>\n
Bachrul said Garuda's on-time performance increased from only
\n77.6 percent in the first semester 1998 to an average of 88
\npercent this year, well above the required standard of 85 percent
\nset by the Association of Asia Pacific Airlines.<\/p>\n
Garuda had also seen improvement in its load factor and
\nrevenue per seat per kilometer, Bachrul said.<\/p>\n
He said Garuda's load factor only reached 54.4 percent with a
\nyield of only 3.4 U.S. cents per seat per kilometer in the first
\nsemester of 1998.<\/p>\n
\"But, in the same period this year, Garuda operated at a
\nbetter average load factor of 68.2 percent and enjoyed a higher
\nyield of 5.1 cents per seat per kilometer,\" he said.<\/p>\n
These signs of improvement have resulted in the turn around of
\nGaruda's financial condition. The airline earned in the first
\nsemester this year a profit of Rp 507 billion, compared to an
\noperational loss of Rp 1 trillion recorded in the same period in
\n1998.<\/p>\n
Garuda said that after enduring a net loss since 1990, it
\nwould book a net profit of $34 million out of the predicted $687
\nmillion of total operating revenues this year.<\/p>\n
Garuda began its debt restructuring program in early 1998,
\nafter sustaining record losses of $46.4 million that year, having
\nbeen badly affected by the collapse of the rupiah against the
\ndollar in mid-1997. (cst)<\/p>",
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