Garuda Indonesia Workers Cancel Planned Strike

Pilots and staff of national flag carrier Garuda Indonesia have canceled a planned strike, the company said on Friday (06/07). (Reuters Photo/Beawiharta)

By : Adinda Normala | on 10:07 PM July 06, 2018
Category : Business, Corporate News

Jakarta. Pilots and staff of national flag carrier Garuda Indonesia have canceled a planned strike, the company said on Friday (06/07).

The workers reached the decision after a meeting between State-Owned Enterprises Minister Rini Soemarno, the Garuda Pilot Association (APG) and Garuda Employees Union (Sekarga) at the minister's home in Jakarta on Thursday.

"Garuda Indonesia's management, along with Sekarga and the APG, have agreed to communicate better to improve the company's performance... They have agreed to not go on strike," Garuda Indonesia executive director Pahala Mansury told a press conference on Friday.

The APG and Sekarga, with 1,300 and 5,000 members, respectively, have pressed for the company's board of directors to be reduced to six members from nine, due to the airline's unfavorable financial situation.

Garuda recorded a net loss of $64.3 million in the first quarter of this year, which was 36.5 percent less than the same period last year. The airline posted an annual loss of $213.4 million in 2017.

A series of mediation meetings ended in deadlock earlier this year, prompting the employee's organizations to issue a strike warning in early May.

"We appreciate the positive step taken by all parties, who are equally committed to serving the national interest," Gatot Trihargo, deputy for financial, survey and consultative services at the Ministry of State-Owned Enterprises, said in a statement on Friday.

The airline will continue with this year's hajj program, with special flights to Saudi Arabia scheduled for between July 17 and Aug. 15.

The company earlier said it expected a modest net profit of $8.9 million for the full year on the back of higher passenger volumes.

Garuda seeks to raise Rp 4 trillion ($278 million) this year from asset-backed securities, Helmi Imam Satriyono, the company's director of finance and risk management, told Reuters.

Mandiri Manajemen Investasi has been appointed to arrange the securities, which will carry an interest rate of between 8.75 percent and 9.5 percent and a five-year maturation date.

Additional reporting from Reuters

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