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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