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iling state-owned Merpati Nusantara Airlines will offer more flights starting in December to generate increased revenue after receiving a Rp 561 billion (US$62.8 million) bridging loan, a senior executive said on Friday.

“In the meantime, we are not going to open new routes but we are optimizing routes that we already fly by adding more frequency, such as Yogyakarta-Makassar, from once a day to twice a day,” Merpati finance director Tonny Aulia Achmad told The Jakarta Post.

The Bandung-Surabaya route would also see flights double from once a week to twice a week because of higher demand in the market due to the healthier economy, he added.

As an airline which served pioneer routes in eastern Indonesia, including Papua, he said more flights to Sorong and Timika via Makassar would be available in December.

“Tension in Papua has led to people flying to Papua to study the situation closely and we believe our airplanes are safe; nothing will disrupt Merpati flights to Papua,” he said.

The airline will be able to add more flights because the bridging loan is being used to pay the cost of overhauling the airlines’ five Boeing 737-300s.

“If one Boeing 737-300 can generate Rp 1 billion [$111,321] per day, we will be able to pay off our debt in time,” he said, adding that the Boeing airplanes were being overhauled at the Garuda Maintenance Facility (GMF) in the Soekarno-Hatta International Airport compound in Cengkareng, Banten and in Singapore.

Tony estimated that additional flights would bring an extra Rp 80 billion into the ailing airline’s coffers, but declined to discuss current revenue.

Part of the bridging loan provided by the State Asset Management Company (PPA) would be used to pay off its debts of Rp 8.2 billion to state oil-and-gas company PT Pertamina, for fuel purchased from Aug. 26 to Oct. 16 this year.

The airline also owes Pertamina Rp 212 billion for fuel supplied during 2006-2007 and Rp 44 billion for the period 2007 to Aug. 26, making a total of Rp 264.2 billion.

Pertamina suspended fuel supplies to Merpati in Makassar and Surabaya’s Juanda International Airport on Oct. 15.

Based on the airline’s business plan, the first debt tranche could be paid off within seven years while the second within two years, he said.

In order to cut spending, the airline is planning to move its headquarters from Kemayoran, Central Jakarta, to either Soekarno-Hatta International Airport or the Sultan Hasanuddin International Airport in Makassar, South Sulawesi, as ordered by State-Owned Enterprises Minister Dahlan Iskan.

Dahlan is also planning to reduce the number of board of commissioners members to three and reduce the board of directors from six to three.

“We are currently in the process of evaluating Cengkareng and Makassar for the new headquarters as part of our budget efficiency plan,” Tonny said.

However, he declined to elaborate on when the headquarters would be moved.

The airline has also limited the number of Merpati officials’ working trips to cut costs, he said.

The shareholders of Merpati are the State-Owned Enterprises Ministry with a 96 percent stake and Garuda Indonesia with 4 percent. (nfo)