Garuda to sell aircraft for quick cash infusion

Garuda to sell aircraft for quick cash infusion

JAKARTA (JP): Garuda Indonesia, the country's flag carrier, will only sell its idle Airbus A300-B4 and Fokker F-28 aircraft for cash as it needs money to improve its financial structure.

Minister of Transportation Haryanto Dhanutirto told reporters yesterday that any party interested in procuring the aircraft should pay in cash.

"It must be in cash or not at all," he said.

The minister said last month that an unidentified private company will buy nine idle Airbus A-300 B4 aircraft from the 46- year-old airline.

The unidentified company reportedly will pay by installment.

Garuda, desperately in need of a fresh cash flow, also plans to sell its 14 F-28 aircraft. Certain domestic companies have reportedly proposed to procure the aircraft.

Haryanto also said yesterday that there were previously five foreign firms which indicated an interest in buying the nine A- 300 B4 aircraft which have been idle at the Soekarno-Hatta International Airport west of here for several months.

"The less serious firms just came and inspected the aircraft without any follow-up," he said, adding that the aging A300-B4 aircraft cost between US$9 million and $11 million each.

According to the minister, the French-based Airbus Industrie only manufactured 11 of the A300-B4 aircraft, nine of which were bought by Garuda.

The domestic company which buys the A300-B4s will have to repair the aircraft's reading lights and air conditioning systems and will then lease five of the planes to Garuda and the other four to Merpati, Garuda's subsidiary.

"The negotiation will hopefully be completed by the end of this month," Antara quoted Haryanto as saying.

Garuda's profit dropped to Rp 73.44 billion (about $33.38 million) in 1993 from Rp 92.98 billion in 1992. The company was estimated to triple its profit to Rp 229.66 billion in 1994. It's total assets are estimated at Rp 3.67 trillion as of last year.(icn)