Merpati decides not to lease CN-235 planes

JAKARTA (JP): Merpati Nusantara, the state-owned domestic air carrier, has decided not to lease 16 CN-235 aircraft due to unusually high operation costs which make IPTN's airplanes commercially unviable.

"I have sent letters to the Ministry of Finance and the Ministry of Transportation notifying that Merpati's financial problems will worsen if we are forced to lease (through a third party) each CN-235 aircraft at US$110,000 per month," the company's president Ridwan Fatarudin told reporters here yesterday.

He said that Merpati, which currently owns 14 CN-235-10s with government equity participation, was asked by the government to operate 16 CN-235-200s. The new generation CN-235 is manufactured by the Bandung-based aerospace company and can be procured through a leasing or a purchase arrangement.

"Instead of procuring or leasing the 16 CN-235-200s, we have suggested that the government itself buy the aircraft and transfer them to us as its new equity."

Minister of Transportation Haryanto Dhanutirto admitted last week that he had intervened in the bargaining between Merpati and PT Industri Pesawat Terbang Nusantara (IPTN) for the procurement of 16 CN-235-200 aircraft.

"But Merpati had not made up its mind even though IPTN had agreed to lower its selling price from $13 million to $9.2 million for each CN-235," Haryanto said last Friday.

Haryanto reaffirmed the government's political will in supporting IPTN's products.

Ridwan said yesterday: "It's true that we have to support IPTN's products, but we also have to take care of our financial soundness."

"Even the CN-235-10 planes currently operated by Merpati have been losing money. On the Jakarta-Bandung route, for instance, we suffer a loss of Rp 406,000 (about $177) per flight. The total loss may reach Rp 861,000 per flight if we operate CN-235-200 in the same route," he said.

He said that his company is facing bigger losses on other routes, such as the Jakarta-Cilacap route, due to fewer passengers.

However, Minister Haryanto said that Merpati recently started making a profit after operating each of its 13 CN-235-10s for more than two hours per day.

But Merpati's Financial Director Sjarifudin Iteroedin denied Haryanto's statement, saying: "Actually, we suffered a total loss of Rp 19.7 million ($8.61 million) in the January-July period because of the high operating costs of the CN-235-10.

Merpati, a subsidiary of the flag carrier Garuda Indonesia, has frequently been criticized for bargaining for the CN-235s at an "unbelievably low prices".

Merpati currently operates 84 aircraft of various types, including; F-100s, DC-9s, F-28s, F-27s, CN-235s, ATPs, Casa-212s and Twin Otters.

Ridwan said that Merpati's operating costs were high due to the wide variety of aircraft it operates. (icn)