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Merpati Nusantara Airlines suspends operations on money woes
Mimi Hudoyo, Jakarta, February 4, 2014
 

MERPATI Nusantara Airlines has finally bowed under the weight of its debts and halted operations until the end of the month.

 

In an internal memo issued over the weekend, Merpati’s operations director, Daryanto, said the airline had suspended all flights between February 1 and 5, while the airline’s route permits were suspended until the end of February.

 

“(With) the decreasing cash-in per day plus the decreasing trust from customers/travel (consultants), we have come to a point where we cannot afford to conduct operational activities,” he said.

 

“However, as soon as (Merpati) is ready and the situation in the field is conducive, we will serve the routes again.”

 

The domestic airline has scaled down its fleet and route network since January 27, but it still has to meet payments for insurance premiums, a US$13.8 million tab for state-owned oil company Pertamina, staff salaries owed since October 2013, and now, refunds for the cancelled flights.

 

The news did not come as a surprise to Indonesian travel companies. The Association of Air Ticketing Companies in Indonesia’s executive director, Pauline Suharno, said: “We have reminded our members to be cautious and not to top up (their ticket sales deposit) too much.”

 

Incito Tour’s managing director, Ng Sebastian, said his company, which operates in eastern Indonesia, “used to rely on Merpati alone in this area many years ago” but switched to others as carriers such as Wings Air, Susi Air and Garuda Indonesia began entering the destinations.

 

Sebastian said as an archipelagic country, Indonesia needs a state-owned airline like Merpati to serve pioneering routes.

 

“Indonesian buying power is increasing and more people can afford to fly. Merpati needs to be saved but the company’s corporate culture needs to change to meet today’s customer demand,” he said.

 

However, Merpati’s vice president corporate secretary and legal, Riswanto, yesterday issued a statement denying that the airline has stopped operations. According to Riswanto, Merpati is in the process of restructuring and revitalisation and therefore has to reduce flights, but he did not mention which routes were still operational.

 

 
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