Merpati expects to earn Rp 900b in income this year

JAKARTA (JP): State-owned airline Merpati Nusantara is expecting robust growth in operational income this year on the back of a sharp increase in the airline's load factor, a company executive said here on Thursday.

Merpati president Wahyu Hidayat said operational income was expected to reach Rp 900 billion (about US$105.88 million) this year, far higher than last year's Rp 400 billion.

He declined to disclose the airline's estimated profit for the year, but said the airline had booked Rp 10 billion in "surplus" as of this month.

The airline's load factor, which plunged to as low as 40 percent last year, has increased significantly this year, he said, adding that the average monthly load factor was 71 percent over the past six months.

"The high load factor is partly the result of the rise in demand for our regular and chartered services linking Jakarta to Kupang and Kupang to Darwin in Northern Australia," he said, adding that the number of passengers from Kupang to Darwin has increased in recent months due to the escalating tension in East Timor.

"Merpati's financial condition is much better this year," he said after the launch of Merpati Nusantara Archipelago Holidays tourism handbook.

He said the airline was upbeat it would soon be able to emerge from the financial hardships it had experienced over the last few years, given its improving financial condition and the progress in restructuring its debts.

Wahyu said Merpati began restructuring its Rp 1.7 trillion in unhedged debts in March and had so far rescheduled about Rp 700 billion of that amount.

He said the restructuring would continue without difficulty due to the positive response it had received from Merpati's over 90 overseas and local creditors, most of whom were vendors, leasing companies, repair centers and maintenance support providers.

"We'll move on with the rest of the program by ourselves. We're not going to ask the government to pay for our offshore debts like Garuda has," he said, calling such a move immature.

Merpati has suffered financial problems for several years with declining income and increasing expenses, forcing it to reduce flights and fleet capacity to cut operational costs.

The reduction of its fleet capacity cut the airline's load factor to below 40 percent.

The airline served 344 routes with up to 90 aircraft before the economic crisis struck in the middle of 1997. It now serves around 269 routes, including three overseas flights, with 30 aircraft. (cst)