Merpati reports Rp 300b loss for first semester

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)