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iling state-owned carrier PT Merpati Nusantara Airlines will immediately close down one-fifth of its existing routes in order to reduce the firm’s losses, an executive said.

“We have to close down up to 20 percent of routes or we will continue to suffer bigger losses that will burden the airline further,” Merpati’s new president director Rudy Setyopurnomo told The Jakarta Post.

According to the company’s data, 112 of 124 of Merpati’s routes suffered losses because the passenger load factor, which represents the flight occupancy, was less than 60 percent.

In fact, some routes saw less than a 10 percent load factor, such as the Jakarta-Bandung route.

“We are restructuring the routes now; some will be closed, some [flight frequencies] will be reduced,” said Rudy, whose recent installment sparked doubts about whether he could solve Merpati’s issues.

The small load factor caused the airline to suffer a Rp 350 billion (US$37.45 million) loss from January to April this year and a Rp 745 billion loss throughout last year.

“This is dangerous. Thus, we have to take serious concrete steps to fix everything in Merpati,” Rudy said, citing an 80 percent load factor target without a definitive time frame.

One of the steps that he has already taken was to postpone the purchase of 40 units of ARJ 21-700 aircraft from Commercial Aircraft Corporation of China Ltd (COMAC) worth $1.2 billion.

Rudy said that the Memorandum of Understanding (MoU) between the airline’s former president director Capt. Sardjono Jhony Tjitrokusumo and COMAC made at the Singapore Air Show last February was merely an act of bravado that had never been in the airline’s business plan.

Instead, Merpati has planned to receive eight new B737 jets this year, increasing their Boeing fleet to 17, to help strengthen its profitable commercial routes such as Jakarta-Makassar, Jakarta-Surabaya and Jakarta-Medan.

The State-Owned Enterprise Ministry’s decision to fire Sardjono evoked strong protests from the airline’s pilots last month as they threatened not to fly Merpati aircraft.

A week after the replacement, some senior vice presidents and managers left the company, causing a temporary halt to operational activities.

Merpati’s chief pilot, Capt. Eman Supriatman, said that mismanagement of the company was because the government did not treat the airline in a corporate business manner.

“The ministry [SOE] has always chosen people who are close to them and have the same point of view as the president director. Only Sardjono Jhony was different and chosen by Merpati’s internal management,” Eman told the Post.

Employee welfare was reportedly better during Sardjono’s leadership, Eman said, adding that the airline could book up to Rp 6 billion worth of transactions per day, while prior to Sardjono the company was struggling to book Rp 5 billion in transactions.

The airline received a Rp 561 billion loan from the State Asset Management Company (PPA) on Dec. 30, 2011, to help it pay off its debts.

The airline’s total debt topped Rp 264.2 billion, mostly for fuel supplied by state oil and gas firm PT Pertamina. (nfo)