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)