Airlines seek delay in jet lease payments
Airlines seek delay in jet lease payments
JAKARTA (JP): Indonesia's airlines are seeking a rescheduling
of their jet leasing payments as the country's monetary crisis
pinches deeper into their balance sheets, an airline executive
said yesterday.
Soelarto Hadisumanto, chairman of the Indonesian Air Carriers
Association, said Indonesian airlines had no better alternative
but to propose the rescheduling of leasing payments.
He said lessors should at least offer a grace period to local
airline companies to enable them to survive the crisis.
Airlines' financial capabilities were now too weak to pay
their installments, he said, adding that in the current situation
the airlines could afford only to pay 10 percent of their usual
monthly installments.
"If the airlines were obliged to pay some US$100,000 per month
per aircraft, the lessor should accept a payment of between
$10,000 and $20,000," he said.
He also asked the government to subsidize airlines'
installments by giving a special rupiah-dollar exchange rate. "If
the government fixed the exchange rate at Rp 5,000 to the dollar,
the remainder (of payments) could be paid in a 12-month period,"
Soelarto said.
Soelarto said the government should also help the
association's members negotiate payment rescheduling with foreign
lessors.
Director General of Air Transportation Zainuddin Sikado could
play mediator to make arrangements with Indonesia's private-
sector debt settlement team, he added.
The team, which was formed after the economic crisis struck
and is headed by former economics minister Radius Prawiro,
proposed a temporary halt in payment of overseas debts owed by
the private sector to allow the debtors and lenders to
renegotiate new deals.
Soelarto explained that because of the strategic role of the
airline industry in providing fast transportation throughout the
vast archipelago, the government should heed the call. He pointed
out that such a facility had been provided for less strategic
debt-ridden companies under Radius' authority.
According to Soelarto, five of Indonesia's six scheduled
airlines, Garuda Indonesia, Merpati Nusantara, Sempati Air,
Bouraq Airlines and Mandala Airlines leased many of their
aircraft, and only Dirgantara Air Service operated with its own
airplanes.
He added that several airplanes had been returned to their
foreign lessors because of the difficulties in paying the
installments.
Kompas daily reported Wednesday that Bouraq would return two
of its nine Boeing 737 jets to Indigo, a Swedian lessor, by the
end of this month.
Bouraq also leased Boeing jets from Forties Aviation and Trans
Avia at an average of $105,000 per aircraft per month.
The plunge in the rupiah's value by over 70 percent against
the U.S. dollar since early July last year has caused a sharp
increase in airlines' operating costs, mostly in dollars.
Indonesia has been the most badly hit by the crisis, which
started in Thailand in July. The rupiah at one time plunged to
its lowest level of Rp 17,000 to the dollar compared to Rp 2,450
in July.
The rupiah remained high at 10,200 against the greenback
yesterday.
The crisis has raised worries that domestic airlines may be
heading toward collapse.
Domestic airlines, which have no overseas routes, are believed
to be in serious danger of shutting down due to huge losses
following the crisis.
A 35 percent increase in domestic airfares this year may
further slash airline passenger volume.
Some airlines have reportedly stopped operating on
unprofitable routes. (08)