Merpati to close down one-fifth of its routes

Ailing state-owned PT Merpati Nusantara Airlines (Merpati) plans to close down 20 percent of its existing routes immediately in order to reduce the firm’s losses, an executive has said.

“We have to close down up to 20 percent of our routes; otherwise, we will continue to suffer large losses that will burden the airline more,” president director Rudy Setyopurnomo told The Jakarta Post over the weekend.

Based on the company data from April 14, 112 out of 124 routes had suffered a loss because passengers’ load factors were less than 60 percent. Some routes, such as Jakarta – Bandung -- a route that supposedly brought a lot of income to the troubled firm -- experienced less than a 10-percent load factor.

“We are restructuring the routes now; some will be closed, and some [flight frequencies] will be reduced,” he said.

He said small load factors had caused the airline to suffer a Rp 350 billion (US$37.45 million) loss from January to April this year, and a total Rp 745 billion loss in 2011.

He added that Merpati had suffered negative equity of Rp 2.791 trillion last year.

“This is dangerous. Thus, we have to take serious concrete steps to fix the situation in Merpati,” he said. (nfo)