Garuda reschedules jet lease payments

Garuda reschedules jet lease payments

JAKARTA (JP): National carrier Garuda Indonesia Airlines
denied yesterday the airline company had defaulted on its lease
payments for six Airbus aircraft.

Garuda spokesperson Arief Hartanto said the airline did not
default on the "operating lease" payments but rescheduled them,
due to the country's currency turmoil and lower revenue last
year.

Arief said the state airline had renegotiated with three
financing companies on its December payment worth US$8 million
for the six airbus A330-300s.

"The financing companies understood the situation of the
Indonesian economy and agreed to postpone the payments until the
situation improves," Arief said.

He did not say when the airline would be able to make
payments.

The three financing companies are French companies Credit
Lyonnais and Parisbas and German company Deutsche Morgan
Grenfell.

Garuda has been making lease payments for a year, worth $630
million, Arief said.

Airbus is a European consortium made up of French state-owned
Aerospatiale, British Aerospace Plc, Daimler-Benz Aerospace, a
unit of Daimler-Benz AG, and Construcciones Aeronauticas SA of
Spain.

Minister of Transportation Haryanto Dhanutirto denied
yesterday knowing about the airline's debt.

"I haven't heard about it, why don't you ask them (Garuda)?"
he told reporters.

Arief said the airline's lower revenue last year was due to
the currency crisis, which had seen the value of the rupiah drop
about 70 percent since last July, and to natural disasters
hitting the country.

The currency crisis caused a slowdown in tourism last year, as
many Asian countries were also hit by the crisis. Tourists from
Asia make up 40 percent of all foreign visitors.

Last year's drop in tourism was also caused by the severe
choking smog in several parts of the country, which also spread
to neighboring countries, caused by forest fires.

Arief said the crash of a Garuda airplane last September also
contributed to the airline's poor performance last year.

A Garuda Indonesia Airbus 300-B4 crashed shortly before
landing in Medan, North Sumatra, killing all 234 people on board,
in September.

Arief said Garuda would economize its operations as part of
improving its performance this year.

"Our airplanes are relatively young, so the maintenance costs
are rather low," he said.

Garuda has reportedly been trying to sell millions of dollars
of assets to pay off debts. (aly/das)