Garuda to sell five of its aircraft to repay debts<\/p>\n
NUSA DUA, Bali (JP): National flag carrier Garuda Indonesia
\nwill sell off five of its aircraft later this month to help repay
\nits US$390 million offshore debts, a company executive has said.<\/p>\n
Garuda's Finance Director Emirsyah Satar said here on Saturday
\nthe planned sales of five Airbus A300-B4s was also part of the
\ncompany's fleet-streamlining strategy this year.<\/p>\n
\"The five aircraft would be sold by the end of the month to
\nrepay our debts,\" he told reporters on the sidelines of a
\ndiscussion on tourism here held by Garuda as part of its 50th
\nanniversary.<\/p>\n
Emirsyah said, however, the sales proceeds would likely not
\ncover Garuda's entire debts.<\/p>\n
\"We cannot expect to pay off our debts with the proceeds of
\nthese aircraft sales,\" he said.<\/p>\n
Several parties from Europe and the United States had
\nexpressed an interest in the aircraft, he said. Most likely these
\ncompanies would convert the planes into freighters, he said.<\/p>\n
Emirsyah declined to give an estimate of the amount expected
\nto be raised from the sales, but said that a brand new similar
\nmodel of the A300-B4 would cost around $100 million.<\/p>\n
\"A used aircraft could be offered 10 times cheaper than its
\nbrand new counterpart, depending on its condition,\" he added.<\/p>\n
Garuda owes $390 million to 80 foreign creditors from
\ncountries like South Korea, Japan, and those in Europe. It also
\nowed Rp 290 billion (about $34 million) to local financial
\ninstitutions, mostly state-owned banks, Emirsyah said.<\/p>\n
He said the airline was currently still making interest
\npayments on its debts but was seeking to further renegotiate them
\nin the upcoming months with the help of its financial consultant,
\nDeutschebank of Germany.<\/p>\n
Garuda has embarked on a massive overhaul of its management
\nand operations, after taking a severe financial beating from the
\nover a year-long monetary woes that have hit the country since
\nmid-1997.<\/p>\n
Last year, it booked a significant net loss, the amount of
\nwhich has not been announced by the company. But a depreciated
\nrupiah boosted last year's gross revenues to Rp 10 trillion,
\nmostly from dollar-denominated international routes.<\/p>\n
This year Garuda expects to earn Rp 270 billion in net profit
\nout of lower revenues of Rp 7 trillion.<\/p>\n
As part of the restructuring, the airline has cut down on
\noperations and downsized its fleet as well as its workforce.<\/p>\n
It now operates 40 aircraft for its 20 domestic destinations
\nand 21 international routes. Nineteen of the planes are leased by
\nGaruda while the remaining 21 are owned by the company.<\/p>\n
The national flag carrier returned six leased aircraft in June
\nas part of its cost cutting program.<\/p>\n
State Minister for the Empowerment of State Enterprises Tanri
\nAbeng said earlier that the airline would return another five
\nleased jets to improve its financial performance.<\/p>\n
This will reduce Garuda's Boeing armada to 12 from 17
\naircraft, all leased under a long-term contract.<\/p>\n
As of December, it has given \"voluntary early retirement\"
\noptions to 1,516 personnel, costing the company Rp 110 billion in
\ncompensation. Garuda's staff now totals 10,953 people.<\/p>\n
Also attending the Saturday event here, Garuda's president
\nAbdulgani said the airline was considering reopening its Jakarta-
\nLos Angeles route for the summer schedule this year.<\/p>\n
The route was closed early last year at the height of the
\ncrisis.<\/p>\n
Abdulgani said Garuda would, however, change the previous
\nrouting that required a stop in Honolulu, Hawaii, because the
\nisland yielded little revenue.<\/p>\n
\"America is an important destination to us, but we are
\ncurrently exploring other routes because Honolulu was not very
\nprofitable,\" he said.<\/p>\n
For its golden anniversary celebration, Garuda invited 113
\nforeign tour companies and 70 local sellers to attend the Travel
\nDialogue and Travel Mart over the weekend.<\/p>\n
-- Devi M. Asmarani<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/garuda-to-sell-five-of-its-aircraft-to-repay-debts-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }