Merpati and Garuda to split soon
JAKARTA (JP): The separation of Merpati Nusantara Airlines from its parent company, Garuda Indonesia, is expected to be completed by the government later this year.
The documents for the separation have been submitted to the State Secretariat and are now awaiting approval from President Soeharto, Minister of Transportation Haryanto Dhanutirto told reporters yesterday after swearing in new officials at his office.
In late 1993, the government announced that it would separate Merpati from Garuda to boost the performances of the airlines. The division has been held up by problems even though the Ministry of Finance -- the government's nominee shareholder in Garuda -- had approved the plan about two years ago.
Differences in the asset inventories of the airlines had caused some of the problems. The two airlines had reportedly claimed millions of dollars in credits against each other; many of the claims overlapped.
Merpati operates 85 aging aircraft including Boeing B-737- 200s, Fokker F-100s, F-28s, F-27s, ATPs, Casas, Twin Otters and CN-235s, which were built by the state-owned Industri Pesawat Terbang Nusantara. The company plans to operate several Airbus A- 310-300 aircraft on its new Jakarta-Melbourne route later this month.
Of the aircraft, there are 17 aging F-28s, 14 CN-235s and 11 Twin Otters that have been accounted for as government equity in Merpati.
Merpati, which serves mostly feeder routes, has not performed well financially, partly because it is the only carrier assigned by the government to serve pioneering, uncommercial routes in remote areas.
Early this year, the airline reported that its losses last year had increased to Rp 93.12 billion (US$39.6 million) from Rp 88.93 billion in 1994. It expects to reduce its losses to Rp 63.74 billion this year.
Garuda operates 59 jets, including Boeing, Airbus and McDonnell Douglas jetliners, for its regional and international routes.
Leabilities
Under its ongoing restructuring program, Garuda plans to sell some of its star-rated hotels to improve its finances. Since the late 1980s, the company has been trying to reduce its liabilities which run to hundreds of millions of dollars.
The government recently agreed to take on Garuda's debts of up to Rp 1.6 trillion ($681.43 million), which it incurred when it bought nine Boeing aircraft. The government wanted to improve the company's financial structure before listing its shares on the stock market in 1998.
Haryanto installed 19 officials yesterday. They included the heads of the new directorates set up within the Directorate General of Land Transportation and the Directorate General of Sea Transportation.
Under a decree signed by President Soeharto on June 6, the two directorate generals have been realigned to improve their functional efficiency.
The Directorate General of Land Transportation now has four directorates in charge of street traffic, railroad traffic, river and lake crossings and city transportation.
The Directorate General of Sea Transportation has had its six directorates reduced to five.
"The directorate of maritime services has been eliminated and its activities will be handled by the Ministry of Industry and Trade," Haryanto said. (icn)