Merpati takes `quiet' route to boost revenue<\/p>\n
M. Taufiqurrahman, The Jakarta Post, Jakarta<\/p>\n
Reeling from stiff competition on busy routes, state-owned
\ndomestic airlines Merpati Nusantara plans to concentrate on
\nflying to places that most other airlines consider unprofitable.<\/p>\n
Merpati Nusantara president Hotasi Nababan said on Friday that
\noffering flights to Indonesia's remote regions had filled the
\ncompany's coffers with a high yield.<\/p>\n
\"We don't want to waste our money on routes that generate only
\na small margin of profit. Merpati has to be smart by not flying
\nroutes that are already plied by many airlines, as the profits
\nare just too low,\" he told The Jakarta Post.<\/p>\n
Nababan dismissed speculation that flying to the country's
\nremote areas had largely contributed to the company's losses.<\/p>\n
The domestic flag carrier asked the government on Tuesday to
\nprovide up to Rp 200 billion (US$24 million) in a financial
\nbailout to improve its performance. In the first quarter of 2003,
\nMerpati posted a loss of Rp 40 billion, a huge drop from the Rp
\n43 billion in total profits in 2002.<\/p>\n
By the end of 2002, Merpati's total debts stood at Rp 1
\ntrillion, most of which is owed to the Indonesian Bank
\nRestructuring Agency (IBRA).<\/p>\n
Nababan said that the profit gained from flying the quieter
\nroutes had boosted Merpati's financial performance.<\/p>\n
\"Merpati has started flying the Pekanbaru-Singapore and Medan-
\nDumai routes. Contrary to what most people believe, these routes
\ngenerate a handsome revenue for us,\" he said, referring to its
\nroutes in the western part of the country.<\/p>\n
To boost efficiency in plying pioneering routes in the central
\nand eastern parts of Indonesia, Merpati will in the near future
\nmake Makassar, South Sulawesi, its operational hub.<\/p>\n
\"Merpati's strength will lie in flying routes in the central
\nand eastern part of the country,\" he said, adding that the
\ncompany would not entirely abandon its flight service in the
\nwestern part of Indonesia.<\/p>\n
Separately, air transportation expert Dudi Soedibyo said that
\nMerpati's plan to move its operational hub from Jakarta to
\nMakassar was appropriate considering that there were already too
\nmany airlines operating in western Indonesia.<\/p>\n
He told the Post that Merpati should not throw itself into a
\nlosing battle in which airlines lowered their airfares to rock-
\nbottom prices.<\/p>\n
\"Flying to Gorontalo in North Sulawesi might not have been a
\ngood idea for airlines in the past, but as you can see now the
\ndestination has turned out to be quite profitable,\" he said.<\/p>\n
He said that Merpati's current woes could be attributed to
\npast government policies that had prevented it from becoming an
\nairline with a good performance.<\/p>\n
\"In the past, Merpati was forced to serve pioneering routes to
\nthe country's remote regions, while busy routes were given to
\nairlines owned by the family and cronies of former president
\nSoeharto,\" he said.<\/p>\n
Merpati had also been burdened with arbitrary government
\npolicies, such as being obligated to purchase CN-235 aircraft
\nconstructed by Dirgantara Indonesia, which was founded by then
\ntechnology minister B.J. Habibie.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/merpati-takes-quiet-route-to-boost-revenue-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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