Andrzej Jeziorski/SINGAPORE
Singapore Airlines (SIA) may be called in to act as management consultant to troubled Indonesian carrier Merpati Nusantara, according to the Indonesian Government.
"It is possible that SIA may co-operate with Merpati," says Indonesian communications minister Agum Gumelar, who ruled out a rumoured similar tie-up with struggling Garuda Indonesia. Garuda is being advised on its operations by Lufthansa Consulting, in a contract that will run to the end of 2000, with an option to extend.
The idea of calling in SIA to help the two state-owned carriers recover had been raised by Indonesia's co-ordinating minister for economy and finance, Kwik Kian Gie, who confirmed that Jakarta had held preliminary talks with SIA. He said the sale of an equity stake in the airlines could be part of any deal.
SIA declines to comment on any talks, but Garuda has ruled out working with the Singaporean carrier. "We are getting good results with the assistance of Lufthansa, and since SIA and Garuda are in the same area, it is a conflict of interests," says Garuda.
Merpati welcomes the initiative, confirming it is seeking a consultant to help restore its fortunes. The company reportedly has debts of about 1.7 trillion rupiah ($170 million), but has been discussing Airbus A318, A319 and A320 purchases as replacements for older types, in anticipation of an imminent upturn in the domestic and regional markets.
Garuda has debts of $1.8 billion, but says it has seen substantial improvements in loads, yields and on-time performance since 1998. Average passenger load factors in 1998 stood at 54% and have climbed to 70%. Yields have risen from $0.034 per seat km in 1998 to $0.054 per seat km, says the carrier.
Garuda says on-time performance has improved from 77% to 88% since Lufthansa came on board in mid-1998. The airline has reduced its fleet by about one-fifth, to 44 aircraft, and cut back unprofitable routes.
Source: Flight International
