Paul Lewis/SINGAPORE
THE INDONESIAN Government has announced a major corporate and financial shake-up of Garuda Indonesia, in an effort to turn around the financially struggling national carrier in readiness for privatisation later in the year.
As part of the airline's restructuring, three senior executives have been removed. The Government has also agreed to assume responsibility for Garuda's 900 million rupiah ($384 million) outstanding debt, from past aircraft-purchases.
The changes involve returning Achmad Subianto to the position of airline financial senior vice-president, replacing Jazid Adam. Achmad had originally lost the job to Jazid in January 1993.
Other new Garuda appointments include Bambang Wahyudi as technical senior vice-president, replacing Suratman after a six-year tenure, and Sudarso Kaderi Wiryono as commercial senior vice-president in place of Kussuyono.
Indonesian transport minister Haryanto Dhanutirto has also announced that the Government will increase its equity in Garuda and take over the remaining financing of five Boeing 737-400s and two 747-400s. The seven aircraft were originally purchased with Eximbank and Citibank financing.
Garuda still has outstanding orders for a further six 747-400s and seven 737-400s, and is the process of renegotiating the deal with Boeing. The airline is short of capital and is looking for lease financing and for the order to be reduced.
The airline has asked Boeing to exchange its last nine 737-400s on order for a mix of 12 smaller 737-300/500s. It is also seeking to trade in a single 747-400 on order for a further five 737-500s for use on domestic routes. The remaining 747-400s would be deferred and swapped at a later date for additional 737s, or possibly 777s.
Garuda's shrinking of its aircraft fleet is seen as a response to growing competition on domestic and international routes from other Indonesian carriers.
Privately owned Sempati Air Transport and state-run Merpati Nusantara have been given permission by the Indonesian Government to fly to the UK. Merpati is considering acquiring either Boeing 767s or Airbus A300-600Rs, while Sempati is looking at the Airbus A340.
Source: Flight International
