Garuda 'may sell' headquarters building

JAKARTA (JP): National flagship carrier Garuda may sell or lease its headquarters building in Jakarta to help it weather the grim financial storm, news reports said on Thursday.

Antara quoted its source as saying that the ailing airline would move out of its current office located in one of Jakarta's most strategic business districts to a more modest area at the airport compound.

"Garuda will soon build an office facility at the Garuda Maintenance Facility area in the Soekarno-Hatta airport," the source said.

The source said the airline would proceed with the plan after it began streamlining its workforce.

Garuda's spokesman Pudjobroto declined to confirm the reports, acknowledging only a plan to move the management close to the airport maintenance facility to closely monitor daily operations.

Garuda President Robby Djohan has announced that the airline will lay-off some 3,000 of its 12,732 employees as early as next month to survive the deepening crisis.

Some of the workers will be given golden handshakes while the remainder will be moved to its subsidiaries, including PT Gapura, PT Aerowisata and Mandira.

The airline is also planning to sell a $300 million maintenance facility unit as a cost-saving measure, as well as several aircraft including five DC-10s, and several Foker 28s.

The European consortium Airbus Industrie has agreed to roll over $750 million of debt owed by the troubled carrier for the lease of six Airbus 330 aircraft.

Garuda, like the remaining four operating scheduled domestic carriers, is enduring the country's worst economic turmoil in decades with soaring operational costs and sinking income. (das)