Merpati books Rp 97.7 billion in profit after two years in red
Merpati books Rp 97.7 billion in profit after two years in red
SURABAYA (JP): State-owned domestic air carrier PT Merpati
Nusantara Airlines booked a pretax profit of Rp 97.9 billion
(US$12.3 million) last year, a turnaround from a net loss
position in the previous two years.
The airline's president Wahyu Hidayat said Merpati was
previously in the red with a net loss of Rp 653.3 billion in 1998
and Rp 417.7 billion in 1997.
"Merpati is still alive. We are improving. We are ready to
compete," he said during a ceremony to mark the awarding of the
ISO 9002 certificate for the airline's maintenance facility from
Sucofindo International Certification Services.
He said the higher profits were due to an improvement in the
airline's operation and the rescheduling of the airline's debts.
Merpati has suffered financial problems for several years with
declining income and increasing expenses.
The weakening of the rupiah against the U.S dollar during the
economic crisis has further burdened the airline as its rupiah
earnings have failed to cover its dollar-based operational costs.
In order to cut costs, the airline was forced to reduce its
fleet from around 90 aircraft in the precrisis period down to 29
in 1999, while flight frequency dropped from 344 flights to 270.
The reduction of fleet capacity has affected the airline's
load factor, causing it to fall below 40 percent. Revenues
dropped to around Rp 70 billion per month during 1998 and part of
1999.
Merpati began to see signs of recovery in the second half of
last year. The load factor rebounded to over 70 percent.
The airline was also successful in restructuring at least Rp
700 billion of its total debts, Rp 1.7 trillion, with over 90
overseas and local creditors, most of whom were vendors, leasing
companies, repair centers and maintenance support providers.
He said the airline was still working on the restructuring
program of its debts to local business partners, the state owned
air carrier PT Garuda Indonesia Airways and aircraft manufacturer
IPTN.
Merpati owed Garuda some $20 million for aircraft leases and
maintenance and $10 million for aircraft leases to IPTN, he said.
Wahyu said the payment of debts to Garuda would be finished
within eight years, while debts to IPTN would be covered partly
by returning two of the 14 CN-235 aircraft that have been so far
leased from IPTN.
Wahyu said the airline was striving to improve its financial
condition and service performance as part of its efforts to
obtain the government's license to provide air transportation to
haj pilgrims going to Mecca.
Merpati has improved its service performance, including its on
time performance which has increased to 85 percent from 80
percent previously, he said.
"With all the improvements, I think Merpati deserves to get
the license. We hope the government will eventually award us the
license so that haj air transportation services shall not forever
be monopolized by Garuda," he said.
Merpati expects to expand its service this year by reopening
the Jakarta-Bandung route, and establish new services to cities
in the eastern part of the country like Kupang and Maluku.
In order to support the expansion plan, Merpati will increase
its fleet to 42 aircraft. There are 35 aircraft at present, he
said. (nur/cst)