Govt rules out SIA support for Garuda<\/p>\n
JAKARTA (JP): Minister of Communications Agum Gumelar ruled
\nout on Tuesday the possibility of involving Singapore Airlines in
\nthe management of state-owned air carrier Garuda Indonesia.<\/p>\n
Speaking to journalists after a meeting with President
\nAbdurrahman Wahid, Agum said the idea of seeking SIA assistance
\nto manage Garuda was unworkable because another foreign airline
\noperator was involved in the job.<\/p>\n
\"The President has confirmed that the idea cannot be realized
\nbecause Garuda has already bonded in a two-year contract with its
\nexisting consultant Lufthansa Consulting AG,\" he said.<\/p>\n
Agum said the existing management consultant had helped bring
\nsome positive results to the country's flag carrier's
\nperformance.<\/p>\n
He said Singapore Airlines might be a suitable consultant for
\nstate airline company Merpati Nusantara Airlines to help it focus
\nits operations on domestic routes.<\/p>\n
\"It is possible that Singapore Airlines may cooperate with
\nMerpati,\" he said without elaborating.<\/p>\n
The idea of inviting Singapore Airlines to manage Garuda or
\nMerpati was initially brought up earlier this month by
\nCoordinating Minister for Economy and Finance Kwik Kian Gie in a
\nbid to help the two airlines accelerate their recovery processes.<\/p>\n
Kwik said the government had held preliminary talks with
\nSingapore Airlines on the possibilities of the airline's
\ninvolvement in the two local airlines' management.<\/p>\n
Kwik also said the agreement could also include the
\npossibility of Singapore Airlines acquiring an equity stake in
\nGaruda or Merpati.<\/p>\n
Garuda promptly rejected the plan, arguing that it was
\nsatisfied with its current consultants Lufthansa Consulting AG
\nand Deustche Bank, and did not need an additional consultant.<\/p>\n
Garuda said it had performed better in terms of load factors,
\nrevenue per seat per kilometer and on-time performances this
\nyear. The company credited Lufthansa Consulting AG and Deutsche
\nBank, which were appointed in mid-1998 as part of Garuda's
\ncorporate and restructuring program of debts totaling US$1.8
\nbillion.<\/p>\n
Lufthansa Consulting helps reengineer Garuda's commercial and
\noperational aspects, while Deutsche Bank acts as a financial
\nadvisor.<\/p>\n
Merpati, however, welcomed the initiative, and confirmed that
\nit was seeking a management consultant and\/or strategic partner
\nto help revitalize its operations and inject fresh funds into the
\ncompany.<\/p>\n
However, Merpati, which is encumbered by its Rp 1.7 trillion
\ndebts, said it had not been informed of the government's plan.
\n(cst\/prb)<\/p>",
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