Merpati drops plan to terminate 80 routes

Merpati drops plan to terminate 80 routes

JAKARTA (JP): State-owned Merpati Nusantara Airlines has
dropped its plan to terminate its 80 unprofitable routes
following an objection from the ministry of transportation.

Merpati's spokesman, Tondo Widodo, said yesterday that the
airlines would comply with any government instruction.

"We'll follow the policy," he said.

Minister of Transportation Haryanto Dhanutirto said the
government would not allow Merpati to terminate 80 routes mostly
in the eastern region, which the airline announced last week,
"unless there are already other airlines serving the areas".

He said such terminations could hamper economic development in
those areas.

"Merpati is only allowed to gradually reduce the flight
frequency on the unprofitable routes such as those having an
average of 30 percent or 40 percent of load factor to one time
per week," he said.

For instance, the Jakarta-Malang route which only had 10 or 15
passengers per flight could be reduced to a weekly service, he
said.

If the routes continued to have few passengers, the government
would make them pioneering routes, meaning that Merpati would be
entitled to receive a regular subsidy from the government, he
said.

Merpati closed several routes last month, including Jakarta-
Malang, Jakarta-Batam and Kupang-Dili.

Merpati unveiled its plan earlier this week to revitalize its
financial structure. The airline would stop serving 80 routes
with low load factors, mostly in the country's eastern region.

In a hearing with House of Representatives members, the
company reported that it had posted a total loss of Rp 137.1
billion last year and another Rp 38.4 billion loss in the first
quarter this year.

The airline, which has just separated from its parent company
Garuda Indonesia, wanted to concentrate on more profitable
routes.

Merpati also planned to set up alliances with overseas
airlines to be more competitive in the regional aviation market.
Merpati has approached several international air carriers,
including Taiwan's EVA Air.

Tondo refused yesterday to elaborate on the alliance plan.

"It's not the right time to talk about that," he said.

EVA Air's Jakarta representative, Peter Chen, told The Jakarta
Post that airlines never rejected opportunities for cooperation.

Chen said EVA Air had held several meetings with Merpati
management. "There's a possibility but it will depend on the
(Indonesian) government.

"Meanwhile, there are a lot of alliances which depend on each
of the governments," he said, adding that EVA Air had set up
alliances with Garuda, All Nippon Airways and Air Macau.

He said airlines always wanted to explore any opportunity,
like Merpati which had shown interest in expanding its
international routes. (icn)