Garuda board of directors fired
The Jakarta Post, Jakarta
National flag carriers Garuda Indonesia has fired its entire 13- member board, in a government move to improve the management of the carrier and its financial performance, a minister said.
The government, which owns Garuda, dismissed six commissioners and seven directors of the Jakarta-based airline on Tuesday, said State Minister of State Enterprises Sugiharto.
"I'm reforming the management of Garuda. I would like to position Garuda as the national flag-carrier rather than being marginalized," he was quoted as saying by Bloomberg in an interview in Hong Kong on Wednesday.
This will be the second time in eight years that Garuda has changed its management team.
"The company has spent the last decade trying to reshape its finances and generate profit, and it has not managed to do so," Sugiharto said.
The report did not mention the new members of the board, but a source at the Office of State Minister of State Enterprises told The Jakarta Post that Emirsyah Satar, deputy president director of Bank Danamon, would replace Indra Setiawan as Pertamina's president director.
Emirsyah would also hold the finance director position. He would be supported by two other directors of Garuda's board of management -- Soenarko Kuntjoro and Agus Priyanto.
Abdul Ghani would be appointed president commissioner, with Gunarni Soeworo, M. Soeparno, Bambang Wahyudi, Slamet Riyanto and Aries Mufti as members of the board of commissioners.
Garuda operations director Rudy A. Hardono said the directors had yet to receive formal notice of their dismissals.
"We have heard about it, but so far we haven't received letters informing us of the decision," Rudy told the Post in a telephone interview.
Although the decision seemed not to surprise him, Rudy said that talks of the board's dismissal was not a major issue within the company.
"We are ready to be transferred or dismissed anytime. Besides, we have been on the board of directors long enough," he said, adding that he had served as Garuda's operations director for the past four years.
Garuda flies to 30 destinations in Indonesia and serves 24 international routes with a fleet of 67 aircraft. In 2003, it flew 7.3 million passengers, 50 percent more than in 2002. Of this total, 5.5 million were domestic passengers. It filled an average of 69.6 percent of its seats in 2003, higher than the 66.9 percent recorded in 2002.
Garuda's 2004 sales may have risen 20 percent to Rp 10 trillion (US$1.1 billion) over the previous year. It spent an extra Rp 700 billion last year as fuel prices rose.
Sugiharto said the restructuring would not stop at Garuda.
Another state-owned carrier, PT Merpati Nusantara Airlines, also needed changes, and this would entail the sale of a stake to investors, he said.
"At Merpati, I have urged the management to undertake a major restructuring so as to allow investors to come into the firm," Sugiharto said as reported by Bloomberg.
The strategy was to improve governance in state enterprises and prevent past practices of corruption, collusion and nepotism, the minister said in his interview.