Garuda plans alliance with foreign airlines

JAKARTA (JP): National airline Garuda Indonesia plans to set up operations with several Asian and European airlines, Garuda president Soepandi said yesterday.

"We have received a direction from the Ministry of Finance that we may ally airlines from Europe or Asia," he said after launching a social mission run by Garuda pilots.

He said Garuda might initially set up an alliance with a foreign carrier for marketing or aircraft maintenance.

"We haven't discussed foreign equity participation," he said

Garuda was recently reported to have offered up to 25 percent of its shares to foreign airlines. Among those interested were KLM of the Netherlands, British Airways of Britain and Lufthansa of Germany.

"The foreign partner must be strong, bona fide and have good financial capability," Soepandi said.

Garuda plans to focus on its core aviation business to strengthen its capital structure and prepare for public listing in 1998.

Garuda expects to make a Rp 154.72 billion ($65.5 million) profit this year.

To restructure its finance, Garuda plans to sell its hotel subsidiary Aerowisata, which manages nine hotels in major tourist destination areas and runs catering and transportation services.

Hutomo Mandala Putra, Sudwikatmono and Arifin Panigoro are among those interested in buying Aerowista hotels in Bandung (West Java), Lombok (West Nusa Tenggara) and Sanur (Bali). The three hotels are owned by Garuda.

The minister of transportation told The Jakarta Post recently that Garuda planned to sell up to 70 percent of its shares in Aerowisata to a state-owned airport operator, PT Angkasa Pura II.

Soepandi refused to comment on the reported low morale of Aerowisata staff.

Sources at Aerowisata said several employees had been told to stay home next Monday. (icn)