Quickbites

Indonesian crisis grounds pilotsIndonesian airlines have been forced to ground 414 pilots and co-pilots as the economic crisis cuts deep, a ...

Indonesian crisis grounds pilots

Indonesian airlines have been forced to ground 414 pilots and co-pilots as the economic crisis cuts deep, a report said. "As a result of the monetary turmoil, many airlines have had to return their leased aircrafts. The reduction of operational aircraft leads to less pilots and copilots needed," Indonesia airlines association secretary general, Benny Rungkat, told Media Indonesia daily. "In general, the total reaches 414," Rungkat said of the number of grounded pilots and co-pilots.

Most of those grounded were from private airlines with scheduled commercial flights he said without giving

specifics. Rungkat said that some of the grounded personnel had found temporary work with Foreign airlines in Malaysia, Singapore, Taiwan and Saudi Arabia. Skyrocketing costs of aircraft leases because of the plunge of the rupiah, compounded by weak revenues have forced Indonesian airlines to return leased aircraft.

Story continues below this ad

Merpati Nusantara Airlines has cut its fleet by 20 per cent,reducing its fleet to 24 planes, Rungkat said. Bouraq, a private airline, serving regional and domestic routes, has returned two of its seven B-737-200 planes and suspended 300 workers. Shanghai bank to recall billions in loansThe Shanghai branch of China’s largest commercial bank has announced plans to recover 135 billion yuan ($16.2 billion) of loans given mainly to unprofitable companies, a newspaper reported.

The Liberation Daily quoted Jiang Jianqing, President of Industrial and Commercial Bank of China’s Shanghai branch, as saying the main target would be property developers who refused to lower prices of their properties. Jiang said loans lent to such borrowers represented an inefficient use of scarce financial resources and seriously affected the quality of banks’ assets and should therefore be diverted to more efficient use.

"China is still not rich in social resources, so a reasonable distribution of these resources is the duty of the economic and Financial sectors," he said.

Gulf countrieswill boom

The economies of six Gulf Arab states are still expected to grow in 1998 despite an expected decline in the oil sector because of the collapse of crude prices, experts said today. But growth will be much lower than the bumper levels recorded in 1996 and 1997 because of strong oil prices and high government spending. "The economies of the Gulf Cooperation Council (GCC) will slow down sharply this year because of lower oil prices but I don’T think there will be a contraction," said Ihsan Abu Huleika, a prominent Saudi economist. "There will be a decline in the oil sector but it should be noted that this sector contributes only a third of the gross domestic product (GDP)," he added but gave no figures on projected growth but other experts expected it to be around two percent if oil prices maintained their current levels, their lowest since the price collapse in 1998. Growth rates could exceed that level if oil prices averaged nearly $15 during 1998, two dollars higher than their present level.