Garuda to carry new local routes next month

JAKARTA (JP): The country's flag carrier, Garuda Indonesia, will resume on July 1 serving three domestic routes which are currently served by its subsidiary, Merpati Nusantara Airlines, an executive says.

Garuda's president, Soepandi, told a hearing with the House of Representatives yesterday that Garuda will again fly the Jakarta- Padang, Jakarta-Palembang and Jakarta-Banjarmasin routes and will gradually add five more domestic destinations in the near future.

Garuda, he said, obtained permission from the Ministry of Transportation last month to run the routes again. The permit will allow Garuda to add 14 more domestic routes to the current 18 it already serves.

He explained that Garuda had been serving those routes before they were taken over by Merpati in 1989. At that time, Merpati, which became a subsidiary of Garuda in 1978, was given the task of serving all domestic routes except those linked to international routes, and to operate some of Garuda's aircraft.

Merpati was also responsible for serving "pioneer routes", which required it to fly to less profitable, remote destinations across the country.

Unlike Merpati, most of Garuda's present domestic routes are highly profitable as they link the country's large cities.

Soepandi reported that Garuda's profit multiplied almost 30 times from almost Rp 6.4 billion (US$2.9 million) in 1993 to Rp 191.2 billion last year.

However, because Merpati suffered a deficit of Rp 65.6 billion, while another subsidiary, PT Aerowisata only made a profit of Rp 23.4 billion, Garuda's consolidated profit was only Rp 148.96 billion in 1994.

Most of the Garuda Group's revenues came from non-operational facilities and services, such as the Garuda Maintenance Facility which brought in Rp 237.8 billion last year, indicating a 26 percent increase from 1993.

Loss

Merpati's president, Ridwan Fataruddin, who was also at the hearing, said the company's loss was mostly caused by the unprofitable pioneer routes which the carrier must serve.

He said that 72 percent of all the routes run by Merpati are low-yielding destinations and 14 percent are medium-yielding routes, while only 11 percent are crowded routes.

Three percent of Merpati's routes are newly opened, he said.

Merpati's poor performance was also caused by the diversified locations of its services, thereby increasing its maintenance costs, he said, adding that it was also caused by the limited operating hours of airports it serves.

Responding to questions from House members on the possibility of a complete split-up between Garuda and Merpati, both Soepandi and Ridwan acknowledged that they were ready for any possible move decided by the government.

"I am just a manager here so I will do whatever I'm told to," Ridwan said.

Last year, Minister of Transportation Haryanto Dhanutirto considered that a split-up was necessary because Merpati was "too much dependent on its parent company" making it "in disarray".

By splitting the two, Merpati was expected to secure its own maintenance contracts, ensure availability of its fleet and minimize postponements and cancellations of services.

Commenting on questions about Garuda's services during the recent haj pilgrimage season, Soepandi said that Garuda intends to demand compensation from the Ministry of Religious Affairs for the 5,869 open seats which cost Garuda Rp 18 billion.

Garuda added 14 extra flights to Jeddah during the previous haj season which ended last week.(pwn)