Merpati flies to more countries and promises better service

Merpati flies to more countries and promises better service

By I. Christianto

MELBOURNE, Australia (JP): Merpati Nusantara Airlines, a
subsidiary of the national flag carrier Garuda Indonesia, is
flying to more overseas destinations and planning to be more
punctual.

"We are working hard to improve our service, particularly the
punctuality of flights," Merpati president, Budiarto Subroto,
told The Jakarta Post on Tuesday aboard a Merpati Airbus A-310-
300 on the Jakarta-Melbourne route.

He said the thrice-weekly Melbourne service, launched early
last month, was part of a campaign to bolster Merpati's image.

"We want to be part of the rapidly growing economy in the
Asia-Pacific region. We want to be a major player in the region's
aviation industry," Budiarto said.

He said the government had approved Merpati's program to
increase its overseas services.

Merpati is facing a tough battle. The airline is known as a
carrier which serves mostly domestic feeder routes. And it does
not have much money.

The airline's development mission, assigned by the government,
has inhibited the airline because it limits the airline to
serving pioneering, uncommercial routes in remote areas.

Problems

Besides its unprofitable routes, Merpati is suffering
inefficiencies because of its fleet's wide variety of airplanes.

During a House of Representatives hearing earlier this year,
Merpati reported its losses had increased to Rp 93.12 billion
(US$39.4 million) for last year, up from Rp 88.93 billion for
1994. Its losses are projected to reach Rp 63.74 billion this
year.

The company needs more than a Rp 600 billion investment to
strengthen its capital structure.

Budiarto said Merpati's maintenance costs were unusually high
because of the variety of aircraft in its 80-plane fleet,
comprising A-310-300s, B-737-200s, F-28s, F-27s, ATPs, Casa-212s,
Twin Otters and CN-235s -- most of which are old.

"The key to win the international competition is qualified
human resources," he said, adding that Merpati had about 4,700
staff.

Budiarto said Merpati was planning new routes including
Jakarta-Singapore, Jakarta-Hong Kong, Jakarta-Seoul, Denpasar-
Bangkok and another service to Japan next year. "In Japan, we
plan to fly to Nagoya or Hiroshima."

He said Merpati was reviewing several poor routes. Merpati
recently terminated its twice-weekly service from Kupang in East
Nusa Tenggara to Darwin, Australia, because few people used it.
But it would step-up its lucrative service routes.

"As part of our image improvement, we plan to serve more
domestic trunk lines next year from Jakarta to Medan (North
Sumatra), Denpasar (Bali), Surabaya (East Java), Ujungpandang
(South Sulawesi), Manado (North Sulawesi) and Balikpapan (East
Balikpapan)," he said.

"We now ply much more feeder lines than trunk lines," he said.

The domestic trunk lines have been dominated by Garuda and
several private airlines, such as Sempati Air, Mandala and
Bouraq.

Merpati recently reported that the ratio of canceled and
delayed (by over 15 minutes) services was 20 percent of its 490
flights a day to 140 destinations.

Merpati changed its Airbus A-310 jet's seat configuration from
its original capacity of 220 seats to only 186 seats to provide
more comfort, Budiarto said.

About 70 passengers were aboard its flight to Melbourne on
Tuesday, and 37 passengers on the return trip to Jakarta
yesterday.

PT Golden Rama Travel senior travel agent Haditono told the
Post that Merpati should serve more destinations in Australia.
"Many Indonesians prefer to go to the Gold Coast, Brisbane and
Sydney. If a tour group has to go back to Melbourne, it will be
costly."

"It's common for a new player in a new international route to
have a low load factor during its first year of operation," the
travel agent said.

Other airlines linking Indonesia and Australia include Qantas
(Jakarta-Sydney and Jakarta-Perth), Garuda (from Jakarta to
Brisbane, Cairns, Perth, Melbourne, Sydney and Darwin), Sempati
Air (Jakarta-Perth) and Ansett (Jakarta-Sydney, Denpasar-Perth
and Denpasar-Darwin).

Besides its service to Australian cities, Merpati also links
Bandung in West Java and Singapore seven times a week and Jakarta
and Kuala Lumpur seven times a week.

The Jakarta-Melbourne route is Merpati's second service to
Australia after its weekly Denpasar-Port Hedland, Western
Australia, service.

Budiarto said Merpati would receive the first of three A-300-
600 aircraft today which will be used for its Jakarta-Hong Kong
service starting Dec. 22.

The aircraft, like the A-310, is leased from a French firm.

The Hong Kong service will be Merpati's sixth international
service after Port Headland, Melbourne and Darwin in Australia,
Singapore and Kuala Lumpur.

Budiarto was optimistic Merpati would improve its image before
completely separating from its parent company, Garuda Indonesia.

The government expects to completely separate the two airlines
this year. This arduous process has been going since 1993: The
airlines have disagreed on asset valuations and credit and debt
transactions.

"We have actually started the first stage of our separation
because Merpati and Garuda now operate with separate accounting
and management systems," Budiarto said.