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Merpati to shift business, flying '€˜umrah'€™ pilgrimage only

State-Owned Enterprises Minister Dahlan Iskan plans to turn the financially troubled carrier PT Merpati Nusantara Airlines into an airline that will focus exclusively on flying Indonesian Muslims to Mecca, Saudi Arabia for the minor haj pilgrimage, umrah

The Jakarta Post
Jakarta
Wed, February 19, 2014

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Merpati to shift business, flying '€˜umrah'€™ pilgrimage only

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tate-Owned Enterprises Minister Dahlan Iskan plans to turn the financially troubled carrier PT Merpati Nusantara Airlines into an airline that will focus exclusively on flying Indonesian Muslims to Mecca, Saudi Arabia for the minor haj pilgrimage, umrah.

'€œSome people have to wait for up to 10 years for the opportunity to perform the haj pilgrimage. Of course, they choose to perform umrah first and haj later,'€ Dahlan said as quoted by kompas.com.

The small quota allocated by Saudi Arabia for the haj has resulted in more and more people opting to go for the minor haj instead, which unlike the haj can be performed any time of the year.

Therefore, Dahlan said, the umrah business has a promising market, considering that the '€œeconomy of the Muslim people'€ has been improving.

Merpati is currently in talks with the Transportation Ministry to negotiate the licensing to shift its business.

Dahlan added that if Merpati acquired the license to become an exclusive umrah airline, it would begin operating as soon as possible. '€œMerpati will start flying people to Mecca as soon as the licensing is approved,'€ Dahlan said.

Merpati stopped operations on Feb. 1 because it was unable to find a solution to its mounting debts, which reached a total of Rp 6.7 trillion (US$565 million).

The government finally grounded Merpati on Feb. 10 to resolve its financial difficulties and is not be permitted to fly until it solves its financial problems.

'€œIf it'€™s ready it can fly. Merpati can get its license again,'€ Transportation Ministry director general for air transportation Herry Bakti Gumay said when the government decided to halt Merpati'€™s operations.

In 2001, the government had planned to shut down the troubled carrier, which mostly served commercial flights between Jakarta and remote areas, particularly in eastern Indonesia.

The plan was dropped and the government instead injected fresh funds into the company amounting to Rp 400 billion.

The cash injection, however, failed to improve the airline'€™s financial situation and its debts increased to Rp 6.7 trillion.

The airline, in addition to its debts, was then unable to meet its payments on insurance premiums and employee salaries, particularly to state-owned oil and gas company PT Pertamina.

Following the announcement of the airline'€™s temporary grounding many of the company'€™s pilots resigned, while 300 outsourced workers lost their jobs. (dwa)

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