Merpati closing jet deal

Merpati closing jet deal

JAKARTA (JP): Merpati Nusantara, a subsidiary of the national
airline Garuda Indonesia, is finalizing negotiations for a
contract to lease eight Fokker F-28 aircraft from a consortium
which bought the jets from Garuda at US$2.7 million each.

Merpati's spokesman, A. Tondo Widodo, told The Jakarta Post
yesterday that the consortium, comprising of PT Arthaska
Nusaphala, PT Sakanusa Dirgantara and KFS Aviation Incorporated
of Japan, will first service and overhaul the Fokker-28s before
they are leased.

Merpati has agreed in principle to lease the jets for seven
years, he added.

Widodo said the two parties had agreed on a fee of $950 per
hour, lower than the $1,375 previously asked for by the
consortium.

"Further details of the deal are still under discussions," he
said.

Meanwhile, Director General of Air Transportation Zainuddin
Sikado told reporters on Wednesday evening that the consortium
would overhaul the jets at the Merpati Maintenance Facility in
Surabaya, East Java.

"The consortium agreed on Tuesday to pay for the jets in cash
within a week," Sikado said.

The three-way deal had previously caused a controversy because
Merpati had offered to buy the Fokker-28s from Garuda.

Many analysts and House of Representatives members criticized
the transaction as puzzling.

After the completion of the F-28 aircraft deal, Garuda will
negotiate the sale of its nine idle Airbus A300-B4s to a domestic
company.

Under the deal, the new owners will overhaul the Airbuses and
will later lease them to Garuda. No further details were
immediately available as to the identity of the bidders.

However informed sources said the buyers would most likely be
another consortium of politically well-connected companies.

Some analysts blamed the early retirement of Wage Mulyono from
the Garuda management last month on what they saw as shady deals
forced down the throat of the national flag carrier. (icn)