Garuda to carry new local routes next month
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)