Merpati backs govt plan to seek SIA's help

JAKARTA (JP): State-owned air carrier Merpati Nusantara Airlines welcomes the government's plan to hire Singapore Airlines as the airline's management consultant.

Merpati's president Wahyu Hidayat said on Monday seeking the help of foreign airlines was part of the airline's program to revitalize its operations.

"If the government really invites Singapore Airlines, we will be happy to discuss all the possibilities, as long as the deal will not inflict new debts on us," he added.

He said Merpati was also open to the possibility of Singapore Airlines acquiring a stake in the company.

Wahyu said Merpati, however, had not been informed of the government's plan.

Coordinating Minister for Economy and Finance Kwik Kian Gie said earlier this month the government had held preliminary talks with Singapore Airlines on the possibility of the airline managing either of the state-owned air carriers Garuda Indonesia and Merpati.

Kwik said the agreement could also include the possibility of Singapore Airlines acquiring an equity stake in Garuda or Merpati.

Garuda rejected the plan, arguing it was satisfied with its current consultants Lufthansa Consulting AG and Deustche Bank, and needed no additional consultant.

Garuda said it had performed better in terms of load factor, revenue per seat per kilometer and on-time performance this year thanks to the advice it received from Lufthansa Consulting AG and Deutsche Bank, which were appointed in mid-1998 as part of Garuda's corporate and debt restructuring programs.

Lufthansa Consulting helps reengineer Garuda's commercial and operational aspects, while Deutsche Bank acts as financial advisor.

Wahyu hoped the foreign assistance should not merely be directed to helping Merpati's management but also in other business partnerships.

"Basically, we are seeking a partner ... to allow us to operate its aircraft and share the revenues between us appropriately. The other alternative is to seek for a strategic partner to inject fresh funds in our company," he said.

He said Merpati had been negotiating with some overseas aircraft operators on business partnership programs.

Merpati and one foreign aircraft operator were currently negotiating a business deal which would allow Merpati to operate the operator's aircraft on a revenue-sharing basis, serving the route to Indonesia from Fukuoka in Japan.

He said the cooperation was expected to help Merpati boost its performance and increase revenues.

Merpati expects its operational income to reach Rp 900 billion this year, far higher than last year's Rp 400 billion.

The airline has been operating at an average load factor of 71 percent over the past six months, much better than last year's average of between 40 percent and 50 percent.

It serves about 269 routes, including three overseas flights, with over 30 aircraft. (cst)