New captain for Garuda<\/p>\n
State Minister for State Enterprises Laksamana Sukardi set a
\ngood example of good governance by deciding not to appoint his
\nelder brother as new president of PT Garuda Indonesia, even
\nthough Samudra Sukardi was the most qualified candidate for the
\nposition, as judged by his technical competence, his managerial
\nrecord and the full support he received from the state company's
\nemployees.<\/p>\n
Laksamana selected Indra Setiawan instead, another Garuda
\nsenior executive. Though Setiawan was not a member of Garuda's
\nmanagement like the other four contenders, and was not widely
\ntipped among the favorites during the race, he was considered the
\nbest alternative, due to his \"independent\" status of not being
\naffiliated with any political party.<\/p>\n
It was surely a great sacrifice on the part of Laksamana, and
\nunderstandably a painful thought process for him, to decide to
\nstop the advancement of his brother's 27-year career at the
\nnational flag carrier. It seemed a strange twist of fate for
\nSamudra that he was to be the first public official to find that
\nclose connections, and in this case family ties, to those in
\npower can turn out to be a liability instead of an asset for
\ncareer advancement.<\/p>\n
This country is still in the early stages of developing a
\nsystem based on high ethical and moral standards, and has yet to
\ninstill a high sense of probity in government and society, which
\nhas for more than three decades been \"polluted\" by widespread
\ncorruption, collusion and nepotism, which were the notorious
\nhallmarks of Soeharto's authoritarian government.<\/p>\n
However impeccable the integrity of the two Sukardis, however
\nsmall the risk of their professional judgment and conduct being
\ncompromised by their family ties, public opinion at the moment
\ncannot yet accept such an obvious potential conflict of interest.
\nThe problem is that Laksamana is directly in charge of
\nsupervising state companies. Samudra's position might not have
\nbeen not so awkward had Laksamana held another portfolio in the
\nCabinet.<\/p>\n
But Setiawan, a 25-year career executive of Garuda, is not a
\nsecond-rate choice either. It is also greatly helpful that
\nSetiawan is taking over when Garuda is already in a much better
\ncondition than in 1998, when the company was already technically
\nbankrupt, with negative capital of almost $235 million, $1.8
\nbillion in foreign and domestic debts, low working morale due to
\nsteady losses from 1993 to 1998 and rampant corruption, collusion
\nand nepotism.<\/p>\n
His predecessor, Abdulgani, who took over the airline's
\nmanagement cockpit in November, 1998, had succeeded in stopping
\nthe company bleeding, restoring it to profitability in 1999,
\nrescheduling and restructuring its debts, improving employee
\nworking morale and, most importantly, developing good governance
\npractices.<\/p>\n
However, Setiawan's tasks are not less challenging in view of
\nthe increasingly tougher competition both within the domestic and
\ninternational market and the declining number of air travelers.
\nThe domestic market has shrunken to about eight million air
\npassengers now from as large as 14 million before the 1997
\neconomic crisis, while the number of scheduled airlines has
\nincreased to ten, with six more gearing up to take off this year.<\/p>\n
Setiawan's top priority should be to fine tune the right
\nbusiness strategy already laid down under Abdulgani's leadership
\nby investing more resources to improve passenger comfort and
\nconvenience and to strengthen the system of good corporate
\ngovernance.<\/p>\n
Abdulgani's strategy of focusing on improving safety and
\nreliability to international standards, expediting the check-in
\nprocess, and applying information technology to enable 24-hour
\ncommunications links with customers, has succeeded in regaining
\npassenger confidence and loyalty. Garuda has even gained
\ninternational awards for its outstanding punctuality and safety
\nrecords over the last two years.<\/p>\n
The new president should capitalize on these impressive
\nachievements to further increase efficiency and load factor
\nbecause an airline is a technology-intensive industry, where the
\nfixed costs -- plane, fuel and support facilities -- are destined
\nto remain relatively high.<\/p>\n
Load factor is crucial because the airline's main product --
\npassenger seats -- is simply a commodity, and a perishable one at
\nthat. When a plane takes off with empty seats, the commodity is
\nspoiled in that the company can either earn money from it (the
\nseat) or get nothing at all. That is because the high fixed costs
\nmake the marginal cost of adding passengers on a partially-filled
\nflight almost negligible.<\/p>\n
In a market where the products -- passenger seats -- are
\nsimilar and the technology (planes) are mostly a choice between
\nBoeing and Airbus, the only clear competitive advantage comes in
\nprice, route networks and the product's value-added features such
\nas ground and in-flight services and modern communications
\nnetworks to generate convenience and comfort for passengers.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-captain-for-garuda-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}