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Jakarta Post

Amid mass resignations Merpati'€™s future looks bleak

  • Nadya Natahadibrata

    The Jakarta Post

Jakarta   /   Sat, February 8, 2014   /  09:34 am
Amid mass resignations Merpati'€™s future looks bleak (JP/Wendra Ajistyatama) (JP/Wendra Ajistyatama)

(JP/Wendra Ajistyatama)

More than 50 pilots have resigned from ailing state-owned carrier PT Merpati Nusantara Airlines.

'€œWe regret their decision but we cannot prohibit them from using their skills to earn a decent living,'€ Merpati Pilot Association chairman Sardjito told a press conference on Friday, adding that the airline had a total of 178 pilots.

The association also said that the airline had decided not to extend the contracts of around 300 outsourced workers, out of a total staff of 1,680.

'€œWithout help from the government, Merpati cannot survive. We hope that the government will still be willing to disburse funds to save Merpati. We hope the government will not decide to shut down our service,'€ he said.

The airline halted operations on Feb. 1 due to its massive debt of Rp 6.7 trillion (US$549 million).

Currently Merpati is unable to meet its payments on insurance premiums and employee salaries, or the Rp 165 billion owed to state-owned oil company PT Pertamina, after twice breaching its debt limit.

The Transportation Ministry'€™s air transportation director general Herry Bakti S. Gumay said that the only solution available to Merpati was a temporary suspension until the airline finished its restructuring process.

'€œThe suspension is the right decision, because as a regulator we include an airline'€™s financial situation in its safety considerations,'€ Herry said. '€œOn top of its current debt, the airline has insurance premiums to pay that are due on Feb. 11. Without insurance, an airline definitely has no permit to fly.'€

Once the airline decided to halt its operations, the ministry automatically suspended its Air Operator Certificate (AOC), the ministry'€™s director of air transportation, Djoko Muratmodjo, told The Jakarta Post.

'€œMerpati has been given a year to reapply for its AOC, otherwise it will have to apply for a totally new business permit [SIUP] by proposing a business plan, should it wish to restart its operations,'€ he said.

He said Merpati staff members should not worry about losing their jobs, as there were many other airlines that could make use of their skills.

'€œA lot of domestic airlines have hired foreign pilots due to the shortage of human resources, which means there are opportunities for Merpati pilots,'€ he said.

Djoko said the ministry had been offering 19 exclusive routes operated by Merpati to other airlines since Tuesday.

The routes include Biak (Papua)-Sorong (West Papua); Makassar (South Sulawesi)-Maumere (East Nusa Tenggara); Makassar-Merauke (Papua); Manado (North Sulawesi)-Palu (Central Sulawesi); and Makassar-Jayapura (Papua).

'€œCitilink has expressed their interest, but they have not decided which routes they will take,'€ he said. '€œWe need to ensure that people can still travel on these routes, that'€™s why we'€™ve offered them to other airlines.'€

Merpati corporate secretary Riswanto Chendra Putra said that the airline, which had originally planned only to suspend its operations until Feb. 5, could not guarantee that it would be ready to operate in the near future.

'€œWe are still trying the best we can to implement the restructuring program, which is assisted by the Asset Management Company. Once the [restructuring program] team says that Merpati is ready to recommence operations, then we'€™ll be back in business, but we can'€™t say when,'€ he continued.

Riswanto made no comment on the resignation of the 50 pilots, saying he was still awaiting confirmation.

Saving Merpati

'€¢ May 2004: House of Representatives approves the conversion of Rp 225 billion (US$18.5 million) in debt owed by PT Merpati Nusantara to the government into equity.

'€¢ Aug. 7, 2008: Government makes another Rp 350 billion cash injection into the company and demands the lay-off of 1,300 of its 2,590 workers to boost efficiency.

'€¢ Dec. 30, 2011: Merpati receives a Rp 561-billion loan from the State Asset Management Company (PPA) to help it pay off its debts.

'€¢ July 23, 2013: State-owned Enterprise Ministry assigns the PPA to restructure PT Merpati Nusantara.

Merpati'€™s total debts amount to Rp 6.7 trillion, comprising debts to the government and several state-owned companies including oil firm PT Pertamina (Rp 165 billion) and airport management companies PT Angkasa Pura I and PT Angkasa Pura II and the PPA.

Source: JP, Kompas

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