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)