Andrzej Jeziorski/SINGAPORE
Garuda Indonesia is in talks with the US Export-Import Bank, Boeing and General Electric to renegotiate leases on six Boeing 737s.
The airline says talks attended by airline president Abdul Gani and president commissioner Robby Djohan began on 11 December in Seattle, focusing on credit terms and length of leases. The airline declines to reveal further details.
The aircraft concerned are three 737-300s and three 737-500s, which Garuda says Gani would like delivered by the end of this month.
Garuda has been unable to pay for 17 737s ordered in June 1996, before the impact of the Asian economic crash on traffic and yields. Since then, the Indonesian rupiah has ridden a rollercoaster and now stands at 45% of its pre-crisis value against the US dollar. Five aircraft from the original order were delivered in 1997, while six more have been sold on to other customers, including Air New Zealand and Heller Financial of Chicago.
Garuda has cut 23% of its workforce - 3,000 employees - in response to falling demand and soaring costs, most of which are paid in dollars, while tickets are sold in rupiah. It has cut services, is returning six leased Boeing MD-11s and is offering five Airbus A300B4s for sale.
The airline intends to stabilise its fleet at 35 aircraft, 15 fewer than the current level, focusing on Airbus A330-300s, 737s and 747s, and McDonnell Douglas DC-10s.
"We would only like to serve profitable routes," says Garuda. This has led to withdrawal of flights to Los Angeles and concentration of European services on Amsterdam, Frankfurt and London.
The airline is working to reschedule about $370 million in foreign debt.
Source: Flight International
