Bisnis Indonesia reports that Garuda Indonesia has allocated US$20 million for severance packages in an effort to cut the Airline’s payroll by 900 employees.
The Financial Director of Garuda, Alex Maneklaran, said the decision to trim staff is part of an overall restructuring made possible by a recent US$105 million cash injection from the Government. Maneklaran said that internal reviews had demonstrated a 15% inefficiency in terms of the Airline's production capacity. "Thus, if 15% of our total staff of 5,600 are terminated, the total firings will be around 900," he explained.
Garuda presently operates 52 aircraft and is seeking capital sources to permit a renewal of its present armada and the acquisition of additional capacity.
The Un-audited results for 2006 show Garuda losing Rp. 298.2 billion (approximately US$37.77 million), narrowing losses from 2005 when the Airline lost Rp 688.4 billion (approximately US$75.65 million).
Garuda reports passenger loads in 2006 averaged 75%, up 6% from the average loads carried in 2005.
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