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ndonesia’s only aircraft producer PT Dirgantara Indonesia (PT DI) celebrated a gloomy 35th anniversary as the company that was once the pride of the nation faces continuing internal and capital problems and is expected to post further losses this year.

“Due to the ongoing concerns we cancelled many of our usual anniversary celebrations,” the company’s aircraft integration director Budiman Saleh told employees at a modest ceremony, Tuesday.

In another part of the company PT DI compound, hundreds of locals queued to buy cheap staple foods using Rp 4,000 (47 US cents) subsidies from the company. At the same
time executives of PT DI’s Labor Association (SPEDI) were working with retired employees who are receiving smaller pensions than their entitlement.

SPEDI chairman Haribes Alinoe-sin said they had just won a case at the Industrial Relations Court filed by 13 retired employees whose pensions were paid based on their 1991 salaries and not on their latest salaries.

In its Aug. 2, 2011 verdict, the court ordered PT DI to pay the retired employees’ pensions based on their latest salaries.

“The total amount the company owes is Rp 6 billion,” said Haribes, adding that the association was currently assisting 25 other retired employees in the same situation and would assist many more.

Other demands include one-third of salaries from February to July 2011 still outstanding. This is apart from money owed by the company to several hospitals and pharmacies, leading to employees being denied previously free health facilities.

Three cooperatives, sources of funds for employees, have suspended operations as Rp 4 billion to
Rp 6 billion owed to them and already deducted from employees’ salaries has not yet been paid by the company. “We hope the government will provide better management so that the aircraft company can be saved,” Haribes said.

Aircraft service director Budi Wuraskito said that a quarter of the Rp 127 billion of funds from the state asset management company would be paid to employees.

The rest would be used to pay suppliers to allow the company to obtain spare parts needed to finish two CN-235 serial 100 units for the Korean Coast Guard (KCG), as well as for the Spirit Aero and Airbus.

Budi said that Rp 3.2 trillion owed to the government was the main source of the company’s financial problems. In 2010, the company, which employs some 3,600 employees, posted a loss of almost Rp 126 billion.

“We estimate that this year we will suffer a further loss of almost Rp 80 billion but the debt will be reduced to Rp 200 billion,” said Budi.

This calculation, however, does not include losses caused by late delivery penalties. The penalty for the late delivery of the two CN-235 KCG units, for example, has reached US$4 million.

In order to restore the company’s finances it currently focuses more on profitable projects such as the production of N-219 aircraft ordered by the Industry Ministry.

Budi also said that the government was the key to the future success of the company that launched the innovative N-250, the world’s first plane to use fly by wire technology, on Aug. 10, 1995, now celebrated as national technology revival day.