Garuda president Abdul Gani resigns

Garuda president Abdul Gani resigns

Debbie A. Lubis, The Jakarta Post, Jakarta

President of flag-carrier Garuda Indonesia Abdul Gani has
tendered his resignation amid reports that the government is
planning to reshuffle the management of the ailing airline.

Speaking during a hearing with House of Representatives
Commission IV for transportation and infrastructure on Monday,
Gani said he had submitted his resignation to the Office of the
State Minister of State Enterprises last Wednesday.

But he dismissed suggestions that his resignation was due to
pressure from the top.

Gani, a former banker, said that he promised three years ago
when appointed Garuda president that he would step down once the
restructuring of the airline's US$1.4 billion overseas debt had
been completed.

Gani's five-year term was due to expire next year.

He expected his resignation would be approved during the
airline's extraordinary shareholders meeting at the end of
February or early March.

Gani's resignation came when the government was about to
reshuffle the top management of Garuda and Merpati Nusantara
Airlines, also a state-owned company, in a bid to help improve
their business performance.

Meanwhile, House Commission IV member Enggartiasto Lukita said
that Abdul Gani had done a great job.

"It is difficult to convince foreign creditors in this
climate. Gani is a professional and Garuda still needs a person
like him," he said.

He also lambasted the government for leaking news of the
reshuffle at Garuda and Merpati to the press, saying that the
news had made officials at the two airlines nervous and unable to
concentrate on their jobs.

He expected such actions would not be repeated.

An independent audit was conducted between 1995 and 1999 on
Garuda, which revealed efficiency losses amounting to US$1.62
billion, $698 million in potential losses and $147 million in
lost opportunities for savings or gains.

But Garuda management insisted that the company had taken
measures to improve efficiency and minimize losses with the
launching of its restructuring program in 1998.

"Since then, we have made advances toward corrective
actions and our operations have now improved significantly," he
said.

Garuda's corrective measures include the closure of 17
flight routes in 1998, staff cuts in 1998 and the return of
uneconomical leased planes in 1999.