Merpati to close some routes for efficiency

JAKARTA. Ailing state-owned carrier PT Merpati Nusantara Airlines (Merpati) will soon close some of its routes to improve efficiency to help salvage the company, which is burdened by huge debt.

Corporate secretary Riswanto said the company, together with the Asset Management Company (PT PPA), which is appointed by State-Owned Enterprises Ministry to better manage the airline, is currently studying which routes it would close temporarily.

“We are now working on a short-term program to help save the company while trying to reveal the most inefficient routes,” Riswanto said.

“We hope that we can finalize the program shortly and for the government to approve it to accelerate the restructuring process.”

Merpati’s current debt is around Rp 6 trillion (US$540 million). Despite the massive debt, the airline is still serving more than 200 routes including international flights between Jakarta–Dili, Timor Leste. The company operates 31 aircraft: 13 Xian-MA60s, 11 Boeing 737s, five Twin Otters and two Cassa 212s.

The plan to close some routes is also triggered by temporary termination of aviation turbine fuel (avtur) supply by state-run energy company PT Pertamina to some of Merpati’s hubs, such as Jakarta, Bandung, Semarang, Yogyakarta, Palembang and Lampung beginning last week.

However, both Pertamina spokesman Ali Mundakir and commercial director Hanung Budya did not respond when contacted by The Jakarta Post on Monday.

According to Riswanto, the energy firm, as of Monday, has not resumed the supply of avtur in several locations. But, he said that the shortage of supply had not affected the airline’s operation.

Both state-owned firms had a deal that Pertamina would continue supplying fuel to the airline as long as they could lower the outstanding debt of fuel to Rp 100 billion by the end of September.

Since Merpati still had Rp 120 billion of outstanding debt to Pertamina, he said that the firm had cut some supply to the carrier.

Separately, Transportation Ministry’s air transportation director general Herry Bakti Gumay confirmed that the airline had discussed the restructuring plan with the ministry.

Herry welcomed the plan because it would help reduce the carrier’s operating costs and lessen the burden.

“This is a good mechanism to save the airline. We understand that Pertamina has cut fuel supply to Merpati. However, based on reports from the field, they are still surviving and able to serve their passengers,” he said.

Herry said that the ministry would continue monitoring the operation of the airline on a daily basis because they would not let any airline operate aircraft without meeting the minimum standard requirements to maintain safety. (The Jakarta Post)