Garuda's new boss vows to improve profits, performance
The Jakarta Post, Jakarta
The newly appointed management of national flag carrier Garuda Indonesia has pledged to improve the airline's operations and boost its profits after it suffered a loss last year as a result of higher fuel prices and stiffer competition in the industry.
Garuda's new president director, Emirsyah Satar -- currently the deputy president director of Bank Danamon -- said he would seek to improve the airline's performance.
"I got a call from Sugiharto (State Minister for State Enterprises) last night -- he's offering me the job and I said OK. With that, I have to leave Bank Danamon," said the 45-year- old financial executive in an interview with Bloomberg on Thursday, without saying when he would start his term in Garuda.
Emirsyah said he would also take over the finance director position, and would be supported by two other directors on Garuda's board of management -- Soenarko Kuntjoro and Agus Priyanto.
Abdul Ghani would be appointed president commissioner, with Gunarni Soeworo, Bambang Wahyudi, Slamet Riyanto and Aries Mufti serving as members of the board of commissioners.
Emirsyah, who served as Garuda finance director from July 1999 to May 2003, played a dominant role in restructuring the airline's massive debts of more than US$1.1 billion in 2001. Before this, Garuda had been staring bankruptcy in the face.
Garuda is scheduled to pay $111.1 million of its remaining debts and interest this year.
For the first time since the firm's financial crisis in late 1998, Garuda may have suffered a loss in 2004 as a result of inefficiency, higher fuel prices and stiffer industry competition, even though revenue is projected to be higher.
Garuda's 2004 revenue is estimated at about Rp 10 trillion (US$1.07 billion), a 20 percent increase from Rp 8.3 trillion in 2003. The rise was attributed mostly to a higher passenger load of about eight million, up from seven million in 2003.
Meanwhile, U.S. aviation giant Boeing Co. is planning to resume talks with Garuda's new management over the purchase of a number of passenger aircraft that have been on hold since the airline's financial crisis.
Stanley O. Roth, Boeing's vice president for Asia international relations, said Garuda had ordered Boeing 777 and 737 aircraft before the crisis.
"The real action with Garuda is the restructuring of the management team. Once that is finished we will resume our discussions with them," Roth said after meeting Vice President Jusuf Kalla on Thursday but he declined to give details.
He said the meeting with Kalla was aimed at improving business relations between Boeing and Indonesia. No Indonesian airline has purchased aircraft from the company since the 1997 monetary crisis.