Garuda told to be fully transparent
Garuda told to be fully transparent
JAKARTA (JP): Minister of Transportation Haryanto Dhanutirto asked the national flagcarrier Garuda Indonesia yesterday to solve its liquidity problems and to be fully transparent to the government.
"State companies like Garuda have to be fully transparent to the government so that we know what is really going on," Dhanutirto said after installing Supandi as the new president of the 46-year old airline company.
Supandi, former Garuda's director for personnel and general affairs, replaced Wage Mulyono who held that position for just about three years.
The minister rejected speculations that Wage's retirement was related to what the mass media saw as too much intervention by his ministry in the Garuda management.
The government is involved only in the macro-policy of state companies. But the government does not want to be called in as a fire extinguisher when a state company is mired in severe difficulties, he said.
"Wage's retirement was due a long time ago but his replacement could not take place until today," the minister told newsmen after the installation.
Rumors about the impending replacement of Wage had surfaced only 18 months after his appointment, amid extensive mass media reports about Garuda's financial problems due to heavy debt service burdens. In addition, differences surfaced between the views of the management and the ministry of transportation in the areas of new jet procurement, the sales of old jets and flight route distribution.
"I don't know anything about jet procurement or sales and their prices," Dhanutirto said in reply to reporters' questions.
Procurement
He said he learned of Garuda's plans to sell its old jets and of the changes in its new jet procurement plans only from reports.
Supandi, who returned to Garuda in late 1993 after serving four years as the chairman of the Batam Development Authority, had earlier served at the airline in 1987-1989.
Both Supandi and Wage are retired air commodores and former adjutants to President Soeharto.
Supandi told newsmen after his installation yesterday that the government had set up a special task force of officials from the ministries of transportation and finance and Garuda itself to work out ways of strengthening Garuda's financial structure.
"The special team will also study Garuda's planned privatization through a direct placement," Supandi added.
The Indonesian air carrier last month agreed to set up a strategic alliance with KLM whereby the Dutch airline will buy a portion of Garuda's shares.
Even though Garuda more than tripled its before-tax profits to an estimated Rp 350.6 billion last year, the company is reportedly facing some liquidity problems due to heavy debt burdens.
The airline also badly needs additional funds to modernize its aging fleet.
Fleet plans
Supandi added that Garuda periodically reviews its fleet plan in line with its financial condition.
"For instance, we have canceled our plan to buy new jets and will instead lease the planes," he said.
He said in 1989 Garuda planned to buy nine Boeing B747-400s, but then changed the plan in 1993. Garuda finally bought only two B747-400s, which are currently in operation, and will lease another one next month.
The 11 MD-11s and 10 A300-600s currently operated by Garuda have also been procured on a lease basis, Supandi added.
"We have canceled the procurement of nine A330 aircraft and instead will lease only six A330s," he said, adding that the lease agreement was still under negotiation with the Airbus company.
He said Garuda last month sold 17 DC-9 aircrafts to an Australian company on a cash-payment basis.
But Garuda is still seeking buyers for its 13 Fokker F-28s and nine A-300-B4 aircraft through competitive bidding, he said. (icn)