Jobs will go in Sempati restructuring

Jobs will go in Sempati restructuring

ONBOARD AWANI DREAM 2 (JP): Privately-owned PT Sempati Air,
saddled by a Rp 600 billion ($245 million) debt, is currently
undergoing a major restructuring that will cut the number of its
employees and stop some of its domestic and overseas services.

Sempati President Santun Nainggolan disclosed to reporters on
board the Awani Dream 2 on Saturday that the company hoped to go
back to its core business and improve performance ahead of its
plan to go public next year.

Describing the current Sempati condition as an overloaded
boat, he said: "Before it sinks, we have to take actions, like
reducing the number of people for the safety of passengers and
the boat."

"Of course, there will be risks, but do we have any choice?"
asked Nainggolan, who joined the weekend cruise to witness the
signing of new members in KualiVa discount scheme for shoppers.
The airline is one of 15 companies taking part in the scheme.

Nainggolan said Sempati had already began phasing out some of
services. "We have stopped our Taipei and Kuala Lumpur flights as
part of the plan that we began six months ago. We hope to
complete the process by the end of this year," he said.

In the next few months, some flights would be halted but
others added, he said. "I couldn't tell which services will be
affected because we're still evaluating all our flight routes."

Nainggolan was appointed president, replacing Hasan M.
Soedjono, last December as part of a management reshuffle to mend
Sempati's ailing financial performance.

Founded in 1968, Sempati began operating scheduled commercial
flights in 1990. Its current shareholders include the Humpuss
Group of Hutomo Mandala Putra, President Soeharto's youngest son,
Armed Forces holding company PT Tri Usaha Bhakti, Malaysian-
Indonesian joint venture Asean Aviation Inc. and timber tycoon
Mohammad (Bob) Hasan, one of the President's closest friends.

Its fleet consists of five Fokker F-27s, seven F-100s, seven
Boeing B-737-200s, two F-70s and four Airbus A-300-B4s.

Last year, Sempati carried 3.6 million passengers and its
sales went up 15 percent to Rp 753 billion. But, no audited
details are publicized.

In March, Indonesia's only credit rating agency Pefindo
downgraded Sempati's rating due to worsening liquidity.

As part of the restructurization, Sempati plans to sell some
of its business units, such as aircraft maintenance, crew
transportation and catering services, Nainggolan said.

"It's better to let other qualified companies to do those.
Sempati could hire their services based on professional
contracts," he said.

"We need to go back to basics, to our core business as an air
carrier," he said.

Nainggolan declined to say how many jobs will be lost as part
of the restructurization.

Sempati currently employs around 2,800 personnel.

He promised not to disappoint Sempati's employees with good
records. "If we have no place for them, we'll try to channel them
to firms owned by the shareholders," he said, citing the Timor
automotive plant owned by Humpuss as one possibility.

Nainggolan said he hoped the move could help Sempati repay its
current debts. "If everything goes well, our plan to go public
next year could come true," he said. (bsr)

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