Garuda to sell hotels in consolidation scheme

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.
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