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Jakarta Post

Merpati aims to be profitable by next year

Debt-ridden state-owned airline PT Merpati Nusantara Airlines (Merpati) aims to return to profit next year as the company has cut losses by almost Rp 2 billion (US$208,000) a day, an executive said in Jakarta on Tuesday

Nurfika Osman (The Jakarta Post)
Jakarta
Wed, September 26, 2012

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ebt-ridden state-owned airline PT Merpati Nusantara Airlines (Merpati) aims to return to profit next year as the company has cut losses by almost Rp 2 billion (US$208,000) a day, an executive said in Jakarta on Tuesday.

President director Rudy Setyopurnomo said that when he took over the business in May, the airline was suffering losses of around Rp 3 billion daily.

“Merpati is going to become a profitable company next year because our performance now is much better than before. We have even increased our passenger-load factor from 60 percent to 86 percent on almost every route,” Rudy said after a hearing with the House of Representatives’ Commission XI overseeing finance.

He said he was optimistic the airline would be much stronger in November as it began to take delivery of Boeing 737-800 NG jets.

“We will receive two Boeing aircraft every month starting in November until we have 24 new jets next year in order to help strengthen our network,” he said.

The airline currently has 29 aircraft operating on a daily basis, including nine Boeing 737s, three DHC-6s, two CASA C-212s, 14 MA-60s and one Fokker 100.

Besides improving the company’s business plan including its marketing management, he said the airline was collaborating with the Corruption Eradication Commission (KPK) to remove staff who had destroyed Merpati.

He confirmed that dozens of Merpati’s employees from pilots to technicians who had engaged in corruption had been sacked.

“I have to admit that there were a lot of employees who destroyed this beloved airline through corruption, especially those who were stationed in remote areas. But, we have reported them to the KPK and they are no longer working with us,” he said.

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

Its total debt reached Rp 264.2 billion, most of which was owed on fuel supplied by state oil and gas firm, PT Pertamina.

To reduce operational costs, the company has so far closed 10 percent of its 124 routes, including the Jakarta — Bandung route.

According to the company’s data, 112 of 124 of Merpati’s routes suffered losses because their passenger-load factors, which represent flight occupancy, were less than 60 percent.

These small load factors caused the airline to suffer losses of Rp 350 billion from January to April this year and losses of Rp 745 billion throughout last year.

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