Paul Lewis/SINGAPORE
GARUDA INDONESIA has reached an agreement with Boeing to cancel and defer outstanding orders for 15 747-400s and 737-400s, in exchange for 17 new 737-300/500s.
As part of the renegotiated deal, Garuda will swap one of its six unfilled 747-400s orders for five 737-500s. The Indonesian airline will also take 12 new 737-300s in place of nine undelivered 737-400s now on order.
The new agreement calls for the delivery of the first 737-500 to Garuda in August 1997, with all remaining aircraft in service by the end of 1999. The smaller aircraft will allow Garuda to operate its domestic and regional services more effectively.
Garuda will defer the last five 747-400s until at least 2000, at which point it will have to decide whether to take delivery of the aircraft or place an order for new aircraft of a comparable value.
According to company sources, the airline is being given a "lot of flexibility" on how to decide. Boeing is understood to have given Garuda the option of trading in some or all of its 747 orders for up to six 777 twinjets.
Garuda originally ordered nine General Electric CF6-80-powered 747-400s for delivery through to 2000, but accepted only two aircraft before running short of capital in 1995. A third aircraft was subsequently taken over by International Lease Finance and delivered to Garuda on a long-term lease.
Similar cash flow problems have prevented Garuda completing its 737-400 order, after taking delivery of the first seven aircraft. It has since been negotiating lease-financing deals as a way of holding down its debt in the run-up to eventual privatisation (Flight International, 24-30 April, 1996).
In March, the airline secured Deutsche Morgan Grenfell's backing to underwrite the lease of six out of nine Airbus Industrie A330-300s on order. The first aircraft is due for delivery in December. Garuda has similarly leased three new replacement MD-11ERs from McDonnell Douglas.
Source: Flight International
