Merpati is technically bankrupt: Official<\/p>\n
JAKARTA (JP): State-owned Merpati Nusantara Airlines has
\ntechnically tumbled into bankruptcy due to huge debts and the
\ncountry's economic crisis, and will need a foreign investor to
\nbail it out, according to a senior official at the airline.<\/p>\n
Merpati chairman Muchtaruddin Siregar said that the country's
\nsecond state airline had a massive Rp 1.8 trillion (about US$212
\nmillion) debt compared to its assets of only Rp 830 billion.<\/p>\n
\"This means that Merpati is already technically bankrupt,\" he
\nsaid as quoted by Antara.<\/p>\n
He explained that Merpati had suffered a drastic drop in load
\nfactor due to the current economic crisis, which had slashed
\npeople's purchasing power.<\/p>\n
He said that Merpati had stopped flying to Singapore and
\nAustralia as well as to many domestic locations in a cost saving
\nmeasure.<\/p>\n
Muchtaruddin said the government had invited foreign investors
\nto enter airlines, but only International Aircraft Financial
\n(IAF) had submitted a proposal.<\/p>\n
He said the Merpati management turned down the IAF offer,
\nwhich would only provide a US$20 fee per passenger in return for
\ncomplete control over Merpati's international routes.<\/p>\n
Over 70 percent of Merpati's routes are unprofitable.<\/p>\n
Muctharuddin said Merpati had to compete with the country's
\nflagship carrier Garuda Indonesia on certain routes.<\/p>\n
The State Minister of the Empowerment of State Enterprises
\nOffice is preparing restructuring plans for the ailing Merpati in
\na bid to create a sustainable business.<\/p>\n
The government is searching for strategic partners, either
\nforeign or domestic.<\/p>\n
One alternative is to remerge the airline with Garuda.
\nMerpati was a unit of Garuda prior to its separation in 1995.
\n(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/merpati-is-technically-bankrupt-official-1447893297",
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