Garuda to lay off 3,000 employees<\/p>\n
JAKARTA (JP): National flag carrier Garuda Indonesia will lay
\noff at least 3,000 of its nearly 13,000 employees as early as
\nnext month as part of a massive restructuring program, the
\nairline's president, Robby Djohan, said on Tuesday.<\/p>\n
Robby said the dismissals, starting in early October, would be
\njust one of several moves designed to enable the airline to
\nsurvive the deepening crisis.<\/p>\n
"We will try to make the rationalization process as easy and
\nfriendly as possible," Robby told reporters on the sidelines of
\nhis visit to the launching of Garuda's new "GA Express" program.<\/p>\n
He said the process would be implemented gradually, with some
\nof the workers being laid off and some possibly moved to Garuda
\nsubsidiaries.<\/p>\n
"We will provide a (severance) package of between Rp 38
\nmillion (US$3,454) and Rp 98 million per person," he said.<\/p>\n
As of last July, Garuda had a total of 12,732 employees,
\nincluding 709 pilots, 78 flight engineers, 2,779 cabin crew
\nmembers, 3,342 maintenance workers, 3,630 commercial staff
\nemployees and 2,194 administrative workers.<\/p>\n
The airline had earlier transferred some 800 employees to
\nground-handling company Gapura Angkasa, a joint venture of Garuda
\nand the state companies Angkasa Pura I and Angkasa Pura II.
\nGapura started operations early this year.<\/p>\n
Garuda may also opt to move some of its workers to its
\nmaintenance facility unit at Jakarta's Soekarno-Hatta
\nInternational Airport.<\/p>\n
The $300 million maintenance facility, however, is planned to
\nbe sold as another cost-saving measure.<\/p>\n
Robby said last Friday that Garuda's current ratio of
\nemployees to aircraft was 273 to one -- much higher than the
\nideal ratio of 167 to each airplane.<\/p>\n
Garuda currently operates 50 aircraft.<\/p>\n
He said Tuesday the airline needed at least $100 million in
\nfinancing to help the company move forward with its restructuring
\nplans.<\/p>\n
"A $100 million loan would be good enough to help us start the
\nrestructuring program," he said.<\/p>\n
The funds would be used to buy spare parts for the company's
\naircraft, to cover maintenance costs and to pay off the laid-off
\nworkers, he said.<\/p>\n
Robby said he was confident that creditors would agree with
\nGaruda's proposal to roll over between $285 million and $300
\nmillion out of the airline's total $400 million in overseas
\ndebts.<\/p>\n
"We can regain their trust because we are able to pay the loan
\ninterest now and because of our efforts to repay the debts," he
\nsaid.<\/p>\n
"They must accept it. After all, they gave us short-term loans
\nwhen they knew that the loans would be used for long-term
\nprograms," he said, pointing out that the foreign lenders were
\npart of the cause of the company's inflated foreign debt
\nproblems.<\/p>\n
Robby said Garuda's load factor on domestic flights had begun
\nto recover and was currently about 70 percent. The company,
\nhowever, still suffers about 10 percent to 20 percent losses from
\nthe high dollar-denominated cost of operating its planes, he
\nadded.<\/p>\n
International flights have generated a healthier cash flow
\nthan domestic ones because they bring in foreign exchange income
\nand have a load factor of 80 percent, he said.<\/p>\n
He estimated domestic flight revenue would total about Rp 2
\ntrillion this year, amounting to 30 percent of the airline's
\ntotal revenue.<\/p>\n
The airline also plans to switch to Boeing 737-300 planes from
\nother aircraft now being used for domestic routes to improve
\nefficiency and cut costs, he said.<\/p>\n
Garuda launched a new program on Monday called the "GA
\nExpress" on its Jakarta-Surabaya route, which provides daily
\nflights every two hours from 6 a.m. to 8 p.m.<\/p>\n
The service, which uses 737-300 aircraft, prioritizes
\npunctuality and is touted as being more efficient in its
\nticketing and reservation system.<\/p>\n
Robby said the airline would apply the system to other
\ndestinations, including Denpasar, Bali; Yogyakarta; Medan, North
\nSumatra; Menado, North Sulawesi; and Pontianak, West Kalimantan
\nby the end of the year. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/garuda-to-lay-off-3000-employees-1447893297",
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