The Jakarta Post
New stakeholders of troubled carrier Mandala Airlines expect the restructured airline to fly “soon” after the acquisition transaction with Singapore’s budget airline Tiger Airways and Indonesian strategic investment firm Saratoga Group was finally closed on Saturday.
Saratoga Capital Investment manager Devin Wirawan said Mandala would be back in the air 90 days after the acquisition and that Mandala was now carrying out the final restructuring phase: securing an air operator certificate (AOC) from the Transportation Ministry.
“I have no details about the application process with the ministry. To my knowledge, the application has not been sent yet. However, talks are taking place,” Devin said.
Devin said that the new stakeholders had not decided whether to continue using the brand name “Mandala”, which has been popular in the country, or change it to “Tiger”.
“We have not yet discussed the details,” Devin told The Jakarta Post on Sunday.
He said that the restructured airlines would serve domestic and international routes within a five-hour flying radius.
He declined to specifically mention the routes or whether the airline would serve Mandala’s previous international routes linking Jakarta with Hong Kong, Macau and Singapore.
Before it ceased operations, Mandala used Airbus A320 after switching from Boeing 737-400 in early 2009 and retiring its much older Boeing 737-200 in early 2008.
“The routes will depend on the number of aircraft. Mandala used to have many aircraft. However, we certainly will operate profitable routes,” Devin said, adding that the airline would operate at least five aircraft as required by Transportation Ministerial Regulation No. 25/2008.
The regulation stipulates that an airline had to have at least have two airplanes and lease three others.
Debt problems, as high as Rp 2.45 trillion (US$286.65 million), ceased Mandala’s operation earlier this year. The debt problems arose because of the high cost of leasing aircraft. Eleven leased planes had been returned.
“Mandala executives concluded conditional sales and purchase agreements and other legal and commercial documents with the Saratoga Group as the financial investor and Tiger Airways as the strategic investor on Friday, Sept. 23, 2011,” the airline said in a press statement on Saturday.
Saratoga is now the majority shareholder of Mandala with 51 percent stake, followed by Tiger’s 33 percent ownership, while the remaining 16 percent is owned by the airline’s existing shareholders and concurrent creditors through a debt-to-equity swap mechanism.
“We are happy to have concluded the deal for this transaction and expect Mandala to be operating in the future soon. We will work closely with our business partners to realize that goal,” Tiger Chin Yau Seng said in the statement.
Sandiaga Uno, who is among the founders of Saratoga Group, and Mandala president director Diono Nurjadin expressed the same view, expecting Mandala “to be back in the air as soon as possible”.
Mandala’s new operation will be based on Tiger’s business plan and will use Airbus A320 aircraft to offer low-fare travel to international and domestic destinations within a five-hour flying radius, Mandala said in the statement. (rcf)