Foreign airlines eye Garuda's maintenance unit

Foreign airlines eye Garuda's maintenance unit

JAKARTA (JP): National flag carrier Garuda Indonesia is
inviting international airlines to jointly operate the Garuda
Maintenance Facility (GMF), according to an airline executive.

The airline's vice president for alliance and marketing
development Robert D. Waloni said on Thursday that Germany's
Lufthansa, Holland's KLM and Singapore Airlines (SIA) had shown
an interest in investing in GMF.

"They're interested in investing in GMF, this is a good turn
for us as we are looking for a strategic alliance," Waloni told
The Jakarta Post after a Garuda press conference for foreign
journalists.

He said he had yet to be informed specifically on how much of
GMF the three airlines were interested in acquiring or when any
deal would be finalized.

Garuda currently cooperates with Lufthansa and KLM through
code sharing on several European routes. Lufthansa also serves as
a marketing consultant for Garuda for a fee.

Garuda president Robby Djohan has said the airline plans to
sell GMF and several aircraft as part of the airline's massive
cost-cutting measures.

The airline is also planning to move its headquarters building
from the commercial district in Central Jakarta to the Cengkareng
airport compound near the GMF management building by the end of
this year. It also plans to dismiss 3,000 of its more than 12,000
employees.

Garuda spokesman Pudjobroto said on Thursday the airline might
hand over the management of the building to its subsidiary, PT
Aerowisata, which manages its hotels.

Since Robby took over two months ago, the airline has
undergone extensive management and debt restructuring after
suffering massive financial adversity this year due to inflated
dollar costs and falling revenues from domestic flights.

State Minister of the Empowerment of State Enterprises, Tanri
Abeng said on Monday Garuda booked a Rp 200 billion (US$18.18
million) profit in August as a result of the efficiency programs.

The programs also include restructuring its domestic and
international routes.

From Oct. 25 until March 27 1999, the airline will run its
winter flight schedule, which will include the temporary closure
of some routes, a reduction of flight frequencies, and the
operation of only certain aircraft.

It will end its twice-weekly flights to Paris, France, and
thrice-weekly flights to Fukuoka, Japan.

It will also cut its flights to Amsterdam to four a week from
six, Sydney to five from seven, Melbourne to five from seven and
Perth to 10 from 14.

Flights to Europe will only use B747-400 aircraft, to
Australia B737-400s, DC100-30s and A330-300s, the Middle East
DC10-30s, and Japan A330-300s.

All other flights to Asia will use A330-300, B737-400, and
B737-300 aircraft.

Robert said Garuda would only fly the really profitable routes
which could generate a positive cash flow.

"Garuda is closing the unprofitable routes, and will only
serve these routes by way of charter flights." (das)