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Jakarta Post
The Jakarta Post
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New chief to set new business plan for ailing Merpati

  • Nurfika Osman

    The Jakarta Post

Jakarta | Tue, August 6, 2013 | 12:44 pm

A new business plan and cost-cutting measures will be in place soon this year in a bid to salvage state-run PT Merpati Nusantara Airlines (Merpati), whose debts amount to Rp 6.5 trillion (US$630.5 million).

Newly appointed president director Capt. Asep Ekanugraha says his new team, which also consists of chief financial officer Daulat Musa and chief operation officer Capt. Haryo P. Soerjokoesumo, expects to implement the new plans within the next two months.

'€œWe are currently reviewing the old business plan that has been running for six months,'€ Asep said in Jakarta on Monday.

'€œWe are not only looking over the financial performance of the airline but also mapping out the routes and other business lines, such as the maintenance and training centers.'€

'€œWe will fully reorganize and restructure this airline.'€

He acknowledged that saving a company with mounting debts and 31 aging aircraft was not easy, especially when other operators were expanding their services by putting brand new planes into operation and opening new routes, both domestic and international.

But the team is optimistic that Merpati will gradually improve once the new plan is implemented.

In order to make their work more efficient, he said that the firm'€™s divisions had been pared down from 30 to only 18.

In addition, he said the new team planned to adopt a new business scheme to help accelerate Merpati'€™s performance by collaborating with strategic partners, like investors and aircraft owners.

'€œIf any party, aircraft owners for instance, wants to tap into the growth of the aviation sector in the country, they can use our network and facilities,'€ Asep said.

'€œBeside, we know the playing field here, so such a partnership will bring advantages to them,'€ he continued.

Collaboration will be open to both commercial and pioneering flight services.

According to its flight permit (SIUAU), the Transportation Ministry'€™s directorate general for civil aviation has approved Merpati to fly 239 routes, 60 percent of them being pioneering routes and one international, namely Jakarta'€“Dili, Timor Leste.

So far, he said that investors from Europe had shown interest in working with the firm to help enhance the capacity of its maintenance, repair and overhaul service (MRO) unit '€” the Merpati Maintenance Facility (MMF) in Cengkareng, Banten.

However, he declined to elaborate on the progress of the deal, saying that it was too early at this stage.

'€œWe will announce it when the time is right,'€ Asep said.

He added that Merpati was considering spinning off the MMF and Merpati Training Center (MTC) to better support the parent company.

Moreover, he said that the firm had been processing an International Air Transport Association Operational Safety Audit (IOSA) for quite some time to improve its performance.

IOSA is an internationally recognized certificate on safety and accepted evaluation system, designed to assess the operational management and control systems of an airline. In Indonesia, only national flag carrier Garuda Indonesia has such a certificate.

Apart from the new plans in the pipeline, chief financial officer Daulat said that Merpati would meet state oil and gas firm PT Pertamina, PT Bank Mandiri, insurance company PT Jasindo and airport operators Angkasa Pura I and Angkasa Pura II after Idul Fitri, which is estimated to fall on Thursday, to talk about the airline'€™s debt settlement.

Daulat said the firm needed ease and flexibility to pay off its debts given the fact that it did not have enough money or aircraft to boost its performance.

The inappropriate government policies have been blamed for airline'€™s troubles, which has seen salvation attempts from fund injections to removal of its president director, who served for 10 years.