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)