Garuda seeks more tie-ups with foreign airlines

JAKARTA (JP): National flag carrier Garuda Indonesia is seeking more alliances with foreign airlines as part of its consolidation and rehabilitation program, a senior company executive has said.

Garuda's vice president of commerce, Bachrul Hakim, said on Wednesday the carrier would recommence alliance talks after halting them due to the economic crisis.

"For instance, we are in the process of having meetings with Northwest of the United States and KLM of the Netherlands to see whether there are any possibilities. It will depend on what we will do, which may include joint passenger services," he said at the Bali Travel Mart.

Garuda currently holds joint services with SilkAir on the Singapore-Balikpapan route; SwissAir, linking Jakarta and Zurich; China Airlines on the Jakarta-Taipei route and Korean Air, with Jakarta-Seoul flights.

He said due to the economic crisis, Garuda in the past six months had pursued a program of consolidation and rehabilitation. Measures undertaken by the organization included closing unprofitable routes, such as to the U.S. and some destinations in Europe, and also reducing flight frequencies.

He said the rehabilitation program composed of two elements, the short-term program from January to July 1999, and the mid- term program or the rehabilitation plan.

"Garuda has also simplified the type of aircraft to maximize load factors," he said.

The carrier's current fleet comprises 44 aircraft, comprising three Boeing 747-400s, four B747-200s, nine B737-300s, seven B737-400s, five B737-500s, six Airbus 330-300s, five DC-10-30s, and five Fokker 28s. In the past, the airline had more than 50 airplanes.

In addition, Garuda had separated non-core businesses, such as the Garuda Maintenance Facility, Garuda ground handling, Garuda Information System, Garuda Medical Center and Garuda Aviation Training, to make the units more responsible for their own finan cial success.

The national flag carrier, suffering from long-term financial difficulties and inefficiencies, had also rationalized and reorganized staffing, achieving significant cuts in human resources, Hakim said.

Garuda executive Walter Prenzier said the company's debt totaled US$1.1 billion, which included some $600 million for leasing some of the aircraft.

He said Garuda expected to gain a profit of $4.5 million this year and $5 million in the year 2000.

He said the airline carried 5.04 million passengers last year, a drop from 7.3 million in 1997.

"This year we expect to carry 4.5 million passenger and 5 million next year due to reduced fleet operations," he said, adding the load factors were estimated to reach 68 percent this year and 69 percent in the year 2000.

Garuda's on time performance improved from 81.28 percent in January this year to 89.84 percent in May. (icn)