Merpati, Garuda to be split

Merpati, Garuda to be split

JAKARTA (JP): Minister of Transportation Haryanto Dhanutirto
said here yesterday that Merpati Nusantara Airlines will be split
next year from its holding company, the national air carrier
Garuda Indonesia.

Haryanto told reporters here yesterday, during a break of a
hearing with the Budgetary Commission of the House of
Representatives, that a study showed that there were conflicts of
interest that affected the operations of the two airlines.

Garuda currently concentrates its service on international and
major domestic routes, while Merpati focuses its business on
domestic flights.

He said the separation of Merpati from Garuda's management
will not affect the latter's plan to sell part of its shares on
an international stock exchange.

For the first time ever, Garuda suffered losses in the first
quarter of this year due to an over-capacity of its fleet for
domestic services.

Garuda's president, Wage Mulyono, said recently that the
company is also offering some shares of another subsidiary, PT
Aerowisata Catering Service (ACS), to private companies.

He said three air carriers -- Sempati Air of Indonesia,
Singapore Airlines and Lufthansa of Germany -- have already
proposed to buy a 60-percent stake of ACS.(icn)