Garuda looks for more equity from government
JAKARTA (JP): Garuda Indonesia, the country's flag carrier, has asked that the seven Boeing aircraft that it has ordered be paid for by the government and transferred to the airline to improve the company's financial structure.
The airline's chief commissioner, Martiono Hadianto, said yesterday that Garuda would first do its "homework" to win approval from the government.
Garuda, whose fleet includes seven Boeing B-737-400s and three B-747-400s, has been burdened with hundreds of billions of rupiah in liabilities since the late 1980s.
Martiono said that if the government pays for the other five B-737-400s and two B-747-400s, which are now on order, and transfers the jets to Garuda as equity, the carrier's liabilities will be reduced by about one-third.
Garuda's current fleet also includes six B-747-200s, 10 A-300- 600s, six MD-11s and six DC-10s, eight B-737-300s and nine aging Airbus A-300-B4s.
A spokesman for Garuda, Jansius Siahaan, said that a B-737-400 aircraft now costs about US$60 million and a B-747-400 about $140 million.
Martiono, who is also the minister of finance's assistant for regional economy and monetary relations, yesterday refused to disclose what kind of homework had to be completed by Garuda.
Analysts believe that it would include a series of restructuring programs to facilitate Garuda's initial public offering plans.
Under its restructuring programs, the airline last year slashed the number of its international services to cut operational costs.
Garuda also plans to invite overseas airlines to buy into the company under a direct investment placement plan before listing on any stock market. A local newspaper recently reported that KLM of the Netherlands and Lufthansa of Germany have proposed to buy a number of shares in Garuda.
The carrier last month signed a deal for the leasing of six Airbus A-330-300 aircraft. The aircraft, to be delivered later this year, will be the first batch of nine A-330-300s ordered by Garuda, which has chosen Deutsche Morgan Grenfell, a German leasing company, to arrange the lease. (icn)