Merpati reports Rp 300b loss for first semester

JAKARTA (JP): State-owned airline PT Merpati Nusantara Airlines suffered a loss of Rp 300.3 billion (US$33.37 million) in the first semester of this year, an increase of nearly 300 percent from Rp 77.39 billion in the same period of last year.

Merpati attributed the losses to the steep rise in operational costs and the huge losses accrued from other business activities.

During this year's first six months, the operating costs rose to Rp 728.17 billion from Rp 455.33 billion in the corresponding period of 1997, while its operating income increased only slightly to Rp 536.95 billion from Rp 412.97 billion.

The nonoperating losses rose to Rp 109.08 billion in the six months to June from Rp 35.02 billion.

The airline's president Budiarto Subroto told a hearing at the House of Representatives on Wednesday that Merpati's condition was no different from the country's four other scheduled airlines, which he said were also suffering in the crisis.

"We are operating at a rate that is way below our operational costs," Budiarto told the House Commission IV for telecommunications, transportation, tourism, public works, and housing.

Despite the government increasing domestic flight rates by 40 percent on Sept. 1, Merpati still cannot cover its operational costs because its revenue is in rupiah while its expenditure is in dollars.

The latter mostly cover aircraft maintenance, spare parts and foreign loans. The rupiah's value has slumped by more than 70 percent against the U.S. dollar since July last year.

This had caused a drop in the operational capability, Budiarto said, highlighting that its gross operating losses had swollen to Rp 191.22 billion in the first semester this year from Rp 42.36 billion in the same period last year.

Budiarto said Merpati's load factor had dropped by 40 percent this year compared to 1997.

However, its market share of the domestic passengers increased to 44.8 percent in this year's first six months from 35 percent, he said.

Merpati was separated from its mother company, national flag carrier Garuda Indonesia, in 1997 in order to lessen Merpati's dependence on Garuda.

In 1996, it suffered a Rp 132.6 billion loss, but this was reduced to Rp 5.5 billion last year.

The airline has temporarily closed some of its domestic routes to reduce losses.

"Because we haven't improved our financial structure and because there are external factors, such as the economy, stability and politics, we could not help but halt some of our activities," he said.

Merpati currently flies 395 routes a day, connecting 107 cities across the country.

However, about 70 percent of the routes are not highly profitable.

As part of a restructuring program, the airline returned its leased aircraft and relocated the remaining planes. It plans to reduce the number of different aircraft to four from the current eight.

Merpati's fleet consisted of 11 types of aircraft before the crisis.

State-owned shipping company PT Pelni, which booked a profit of about Rp 15.08 billion from its operations last year, expects an operating loss of Rp 10.26 billion this year due to a steep rise in operating costs.

"Our foreign exchange income only contributes 3 percent of our total revenue, while our foreign exchange spending totals 30 percent of the total spending," Roesman told the same hearing.

The company's highest operational cost came from the dollar- denominated purchase of spare parts, lubricating oil, ship insurance, as well as the loan payment on the purchase of the Pangrango ship from PT PAL, he said.

The price of spare parts had risen 400 percent, while that of nautical equipment 200 percent, fuel 50 percent, lubricants 300 percent, medicines 300 percent, food products 60 percent, and paper and writing equipment 125 percent, he said.

But Pelni president Roesman Anwar said that the shipping company would still book a gross profit of about Rp 9.91 billion this year, down from Rp 33.6 billion last year, because of a significant amount of other income.

He said that an expected profit of about Rp 1.11 billion from the company's subsidiaries would boost this year's consolidated profit to Rp 11.03 billion, down from Rp 33.40 billion last year.

Pelni currently has 22 passenger ships with a capacity of 5.95 million people and 23 cargo ships with a total capacity of 88,488 deadweight tons. It sails to 90 ports. (das)