Garuda to sell hotels in consolidation scheme

JAKARTA (JP): National flag carrier Garuda Indonesia will finalize the sale of its two hotels in April, the airline's president, Soepandi, said yesterday.

"We hope we will be able to sign the sales before the end of next month," he said.

He said the sale of the two hotels, in Sanur, Bali and Seginggi, Lombok would be part of the airline's business consolidation program.

The hotels are managed by Garuda's subsidiary, PT Aerowisata. Aerowisata also manages a hotel in Bandung, West Java, and the airline's catering and transport service.

He refused to say who would buy two hotels.

Soepandi said earlier Garuda had shortlisted 35 firms which wanted to buy the hotels.

He said the proceeds from the sales would be used to improve the company's efficiency.

"By focusing on our core business of being an airline we will be able to improve our operation and human resources" he said after signing an agreement between the airline and state-owned life insurance Asuransi Jiwasraya.

Soepandi said Garuda would sell also PT Aerowisata Catering Service this year.

Asset sales are expected to enable the airline to cut its operating cost in accommodation, catering and transportation for its crews by about 20 percent.

Garuda has began selling some of its assets including spare parts for DC-9 and F-28 aircraft which the airline no longer uses.

The airline suffered a Rp 87.44 billion loss last year, down from Rp 342.79 billion in 1995.

Soepandi said the last two years' losses were because of rising fuel prices and an increasing number of jet overhauls.

He said reports on cholera in Bali last year also caused a 30 percent drop in passengers from Japan.

Under the agreement signed yesterday, Asuransi Jiwasraya will manage the Garuda's employee's life insurance and pension funds. (02)