Garuda to divest from subsidiaries

Garuda to divest from subsidiaries

JAKARTA (JP): National flag carrier Garuda Indonesia plans to
divest from all of its subsidiaries in order to focus on its air
transportation business, the airline's new boss said here
yesterday.

Robby Djohan, Garuda's new president, said the ailing airline
was prepared to do anything it had to to lift itself out of its
financial troubles.

"Garuda will be a company which provides transportation
services and ticket sales only," Robby told journalists after a
hearing with the House of Representatives Commission IV for
public works, transportation, communications and public housing.

He said subsidiary services such as ground handling and
catering would be "better off handled by somebody else".

Robby, appointed president Monday, said some of the
subsidiaries were not profiting Garuda and that there was no
reason to keep them.

The investment and time spent to manage the firms do not match
up with their future prospects, he said.

Garuda has two subsidiaries: the diversified Aerowisata and
ticketing system operator Abacus.

Aerowisata has its own subsidiaries: Aerowisata Catering
Service, Satriavi Tour and Travel and Mandira Jasa Wahana, a
company which provides group transportation services.

Garuda has also established a joint-venture company, Gapura,
with state-owned airport operators Angkasa Pura I and Angkasa
Pura II to diversify into ground-handling services. The joint
venture, however, has not started operating.

Garuda has numerous partnerships with private companies as
well.

Robby said he would cleanse Garuda's partnerships from graft
to restore the airline's tarnished image.

Last week, over 2,000 employees of the airline staged a
protest outside of its headquarter here, demanding then president
Soepandi to step down and an end the company's practices of
corruption, collusion and nepotism.

The protest led to Soepandi's resignation and a promise to
stop cooperation with private companies linked to ex-president
Soeharto's family, including cargo handler PT Angkasa Bina
Wisesa, PT Bimantara Graha Insurance and PT Ototrans.

Robby said Garuda was not planning to further reduce its
fleet. Instead, the airline will restructure both its
international and domestic flight routes.

International flights from Asia or America, for example, could
stop in Bali as their final destination. Passengers wishing to
continue to other cities could then be carried by smaller
aircraft, he said.

Garuda currently has 57 aircraft but plans to return six of
them to foreign lessors due to declining passenger loads and
increasing maintenance costs. (das)