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The spate of crashes among domestic airlines has lead many
travelers to migrate to Garuda Indonesia, but even the national airline
is apparently not immune to disasters.
On the morning of March 7, flight GA 200 heading for Yogyakarta from
Jakarta crash-landed at Adi Sucipto Airport, killing 20 passengers and
one crew member. The remaining 119 passengers and crew members
survived, including the pilot and co-pilot.
It was a dark day for Emirsyah Satar, the president director of Garuda,
who has been slowly turning around the loss-making airline since taking
over two years ago.
Emirsyah is no stranger to Garuda, having served as finance director
(CFO) for five years from 1998 to 2003. In a recent interview he talked
about the crash, safety issues in the airline industry and Garuda's
recent performance. We understand that the pilot and crew are currently
being questioned about the Yogya crash. Is there any information that
you might be able to share with us about the crash?
It is too early to tell. We should wait until the national airline
investigative body, the KNKT, comes out with their findings. The
cockpit voice recorder in the black box has not been easy to read, but
the flight data recorder is intact and can be analyzed. We hope this
can shed some light on what caused the crash. All crew members are
currently cooperating with the relevant authorities investigating the
crash. What steps has Garuda taken since the crash occurred?
In relation to the passengers, we have taken care of all medical costs
for all passengers and flew in passengers' relatives. We have also paid
Rp 25 million in compensation to the family of every passenger affected
by the crash as a santunan simpati (sympathy contribution). And for the
families of the passengers killed in the accident, we have paid Rp 600
million as bereavement contributions.
We have also reviewed the ground procedures and maintenance records,
and found that standard procedures were complied with. Once we get more
information on the flight from the recorders and the investigation,
then we will determine if there are any problems or issues that need to
be rectified, which is part of our routine 'lessons-learned' exercise.
In fact, we do this not only for Garuda accidents, but for all recent
domestic airplane crashes. We simulate what happened and try to find
what lessons we can learn from the disasters. There is a growing
concern about the safety standards of air travel in Indonesia. Could
you give your assessment on this issue?
The government's National Transportation Safety and Security Evaluation
Team (the EKKT), under the chairmanship of Pak Chappy Hakim, will soon
be coming out with their findings and their recommendations. This
should help improve safety conditions.
On safety, one key point is discipline, especially among three
interrelated parties -- the regulator, operator and passenger. This
involves the discipline of the regulator in enforcing the rules, the
operator in complying with them and the passenger in following
operator's instructions.
Garuda is very strict in complying with these rules. We carry
sufficient supplies of spare parts and, if we need to, we will delay a
plane in order to replace a defective part. Then, at the end, it is the
pilot who makes the final call on whether to fly or not. How is
Garuda's safety record to date, and how do you compare with other
domestic airlines?
In terms of our safety record, Garuda has had 3 major accidents
resulting in fatalities in the last 10 years. This includes the
Airbus-300 crash in Medan in North Sumatra in 1997, the Boeing 737 that
crashed into the Bengawan Solo river in 2002 and this month's GA200
crash in Yogyakarta. We take compliance seriously and are subject to
heavy scrutiny.
As we fly international routes, we also need to be certified by
international aviation bodies, such as the FAA and JAA. In addition, we
are reviewed periodically by the major oil companies and the U.S.
Department of Transport, which is required by them as we fly their
executives and U.S. officials. What has the impact of the crash been on
Garuda's performance and what about the recent announcement that the
airline is seeking a strategic partner?
It is too soon to assess the impact, but fortunately our domestic load
factor is still above 83 percent. Last year was a consolidation year,
where we were able to turn around several routes and generate profits
on 21 out of 27 domestic routes. By contrast, 16 out of 25 domestic
routes were losing money back in 2005. We also streamlined our
international routes, which account for half of our revenue.
Currently, the government has decided to invite a strategic partner to
invest in Garuda. The government has set up a team lead by Pak Sahala
Lumban Gaol, the deputy to the Coordinating Minister for the Economy,
to seek a strategic investor that could provide additional capital to
restructure Garuda's current debt and grow the airline.
As for our financial performance, Garuda narrowed its net losses by Rp
497 billion in 2006, down from Rp 688 billion to about Rp 191 billion.
In a few months, we will be able to announce our financial results to
the public.
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