Tuesday, August 17, 2010

Citilink will separate from Garuda Indonesia


Garuda Indonesia plans to spin off (separation) of its strategic business units, Citilink. Spin-off will be done after the initial public offering (IPO) which scheduled on fourth quarter 2010.

"The most fast of the spin-off is in the second half of next year. If IPO will done this year, it takes approximately 3-6 months to conduct activities such as spin-off," said Director of Strategic and Technology Garuda Indonesia, Elisa Lumbantoruan.

According to Elisa, the spin-off was conducted aiming to isolate the resources side, as well as from the operational side of the two airlines. This is because the working culture of the two airlines will be very different due to class differences of the two airlines. Garuda Indonesia will go into Full Service class, while Citilink join in No-Frills or Low Cost Carrier (LCC) class. "In addition, the spin-off also can simplify the management of capital. For example make it easier to find partners or investors”, Elisa explained.

Citilink’s spin off has been scheduled since 2009. However. until now the spin off plan is intercept by a number of requirements in order to get SIUP (Aviation Business License) from the Ministry of Transportation, among them are the business plan and the procurement of the fleet. Since not get the SIUP yet, currently Citilink still become one with Garuda Indonesia. Citilink have the same flight number with Garuda Indonesia, which begins with the letters GA.