Garuda clips its wings to ride out economic crisis
Garuda clips its wings to ride out economic crisis
JAKARTA (JP): Crippled by the economic crisis and pressured by
its employees, the financially distraught national flag carrier
Garuda Indonesia promised yesterday to sever links with companies
linked to Soeharto's family and cronies and return leased
aircraft to ensure its survival.
Speaking to more than 2,000 employees protesting outside
Garuda headquarters on Jl. Medan Merdeka Selatan and demanding
total reform of the company, Garuda president Soepandi said he
was ready to step down if necessary to facilitate reform.
"Your demands are in line with our current policy; I'm ready
to be replaced, and I will soon be replaced," Soepandi told the
demonstrating employees.
The employees booed and demanded Soepandi -- a former adjutant
to former president Soeharto -- resign on charges of corruption,
collusion and nepotism.
Soepandi then rushed into the Garuda building and held a press
conference on the 21st floor to explain the company's short-term
plans to survive the crisis.
He said he would annul cooperation with private companies
linked to Soeharto's family, including cargo handler PT Angkasa
Bina Wisesa and PT Bimantara Graha Insurance Brokers and PT
Ototrans.
Angkasa Bina Wisesa is allegedly controlled by Soeharto's
sister Martini Tubagus Sulaeman, and Bimantara Graha Insurance
Brokers is owned by the Bimantara Group, which is controlled by
Soeharto's second son Bambang Trihatmodjo.
According to Garuda employees' spokesman Captain Shadrach M.
Nababan, Garuda suffered losses of Rp 6 billion (US$500,000) a
month in its cooperation with Angkasa Bina Wisesa.
Bimantara Graha Insurance Brokers has allegedly monopolized
the insurance of Garuda's airplanes.
Soepandi added that Garuda would also meet the employees'
demand to return leased aircraft and only use planes it owned
itself to reduce mounting costs due to the weakening rupiah.
"In our survival plan we are trying to return all the aircraft
that we have leased. It is still under negotiation, but we only
want to operate aircraft that we have already paid for," he said.
Garuda operations director Captain Dharmadi added that the
company would return six leased McDonnell Douglas MD-11s on June
15 as part of the restructuring of its fleet from its existing 57
aircraft to 45 by next year.
Under the plan, Garuda will also return six Airbus Industrie
A-330s, Dharmadi said.
Subakti, a Garuda pilot who joined yesterday's demonstration,
said the return of those planes would phase out all of Garuda's
most modern jets and precipitate a brain drain.
"Frankly speaking, it would reduce further Garuda's
competitiveness in the international market. But I think it's
better to return all those leased planes because their lease
prices were all marked up," he said.
Nababan added that the company leased an Airbus at US$11,000
per flying hour but the market price is only US$6,000 to US$8.000
an hour.
Some of the demonstrating employees also questioned Garuda's
policy to hand over ground handling in Bali to PT Ototrans, a
company with allegedly strong link to Soeharto.
Companies linked to Soeharto's family and associates have come
under increasing scrutiny since he resigned on May 21 amid
mounting political and economic chaos.
The companies have been accused of trading on their ties to
the president to obtain favorable terms in business deals.
Nababan, Subakti and eight of their colleagues met yesterday
with State Minister of the Empowerment of State Enterprises Tanri
Abeng to present their demands.
"Reforms must be conducted quickly at Garuda, starting with
changes in the top management," said Nababan, who has been a
Garuda pilot for 26 years.
Tanri said that the government would appoint a new president
for Garuda by Monday and said the most promising candidate thus
far was banker Robby Johan.
"Robby meets all the criteria; he is professional; he has
integrity; he has experience in restructuring companies and he
has commitment and dedication," Tanri said.
When asked about Robby, Nababan said he and his friends could
see no problem with the government's choice as long as the
candidate was not picked based on collusion or nepotism and he
had good knowledge about the airline businesses.
Contracts
Tanri warned that state firms should not arbitrarily annul
contracts with third parties without consulting the government.
"All contracts which need to be reviewed must be identified
and submitted to the government. We will form a team, a task
force, to analyze the contracts," Tanri said.
When asked about a move by state electricity firm PT
Perusahaan Listrik Negara (PLN) to annul a power-purchase
contract with PT Cikarang Listrindo, Tanri said: "That's not
correct."
He said such an arbitrary act could give a negative image
about Indonesia.
PLN president Djiteng Marsudi said last week that it had
notified Cikarang Listrindo, an independent power producer owned
by Soeharto's cousin Sudwikatmono, that PLN would stop buying
power from it beginning June 15.
Djiteng said yesterday that if he did not take action to
review his company's contracts, which were forced on PLN in
questionable circumstances stinking of corruption, collusion and
nepotism, it would give a bad precedent to future business
practices in the country.
"And this would worsen our image in international forums,"
Djiteng said.
About 200 demonstrators, including students, activists and
retired PLN workers, who billed themselves as a Committee for PLN
Reform, went to the Ministry of Mines and Energy and PLN
headquarters, to give support to Djiteng's move. (jun/jsk/rid)