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Will Heads Roll?

Garuda Being Called to Account for Major Breakdown in its Management and IT Systems that Crippled Carrier for Much of a Week.


Bali News: Will Heads Roll?
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(11/27/2010)

The Minister for State-Owned Businesses (BUMN), Mustafa Abubakar, has called on PT Garuda Indonesia to conduct a thorough investigation into a massive computer system failure that caused nation-wide air transportation havoc and widespread flight cancellations over three days.

Mustafa confirmed that his office has held meetings with Garuda's senior management requesting a detailed explanation while at the same time insisting passengers inconvenienced by delayed and canceled flights be adequately compensated and replacement flights found as soon as possible.

A switch-over and data migration of the airlines' Operational Control System (IOCS) that schedules aircraft utilization, crew assignments and passenger departures crashed on Sunday, November 21, 2010, leaving passengers waiting at airports across the nation staring at parked aircraft lacking the required flight and cabin crew. In the course of the data migration important data was lost, blamed by the airline's information technology staff on a loose computer cable.

Most flights had returned to normal by Wednesday, but with persisting complaints of long delays from Haj pilgrims stranded in Saudi Arabia seeking to return on Garuda flights from Mecca.

Legislators are calling for severe punishment to anyone ultimately determined to have committed the error.

Struggling to affect damage control, the CEO of Garuda, Emirsyah Satar, incredulously told Kompas that the flight chaos had not caused the airline a loss, maintaining that only potential income was loss and that parked aircraft incur no operational expenses. Amazingly not included in Satar's calculations were the double-money-back paid to passengers whose flights were cancelled, the hotel and transportation costs compensated to stranded passengers, the fixed operating costs of an airline essentially operating without income during the shutdown period and the on going depreciation of aircraft and other equipment.

Perhaps the greatest cost remains to be tabulated. With Garuda seeking to launch an initial public offering (IPO) on February 11, 2011, the timing of the failure in the airline's information technology and general management could hardly have been worse. The fiasco now potentially threatens to drag down prices for the airline's shares price originally targeted to yield US$330 million in much needed cash for the national carrier.


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