Garuda cancels sale of aging aircraft

Garuda cancels sale of aging aircraft

JAKARTA (JP): Garuda Indonesia has canceled its plan to sell nine idle Airbus A300-B4 aircraft because it has failed to find a buyer who will pay for them in cash.

Garuda's president, Soepandi, told reporters last night that the airline planned to refurbish the aging aircraft and put them back into operation.

Garuda, which is badly in need of fresh funds to support its cash flow, originally planned to sell the Airbus aircraft, for cash, to any company which would refurbish them and then lease them back to the airline.

Director General of Air Transportation Zainuddin Sikado told reporters last week that the Bimantara Group, one of the country's leading conglomerates, had expressed a willingness to purchase the aircraft from Garuda under a lease-back agreement.

"The proposed deal is quite similar to the previous one, in which a consortium of private companies bought eight Fokker F-28s from Garuda and then leased them to Garuda's subsidiary, Merpati Nusantara Airlines," he said at the time.

However, a Bimantara executive told reporters on the following day that the director general's statement was groundless.

Garuda's procurement division chief, Taufik, said last night that no company had been prepared to pay cash for the Airbuses.

"A British company recently proposed to buy the jets by installments over 15 years. Garuda rejected the proposal outright," he said.

The aging A300-B4 had been offered for sale for between US$9 million and $11 million each.

Garuda's technical director, Suratman, said that world aircraft prices were currently unstable and that, therefore, it was not a good time to be selling the aircraft.

He said that Garuda would refurbish the jets at its maintenance workshop with the assistance of Airbus Industrie of France.

"We don't know yet when the aircraft will be refurbished," he said, adding that when ready, the A300-B4 were likely be used for the airline's regional services. (icn)