Merpati to complete split from Garuda

Merpati to complete split from Garuda

JAKARTA (JP): Minister of Transportations Haryanto Dhanutirto
said Merpati Nusantara Airlines will be completely separated from
its holding company, Garuda Indonesia, later this year.

Merpati's management has been separate from Garuda since last
July to prepare for the break. The Ministry of Transportation and
the Ministry of Finance have been sounding out further separation
of the assets and liabilities.

"Merpati's dependency on its parent company is so strong that
-- to tell you the truth -- the company is technically in
disarray," Haryanto said last week.

Merpati has been constantly criticized for its unprofitability
and poor service, especially the postponement and cancellation of
many flights.

Haryanto suggested that Merpati secure maintenance contracts
with its partners to ensure the availability of its fleet, and
therefore minimize postponements and cancellations.

"By making maintenance contracts, I hope Merpati will be able
to stand on its own within a year," Haryanto was quoted by Kompas
as saying.

Merpati's president, Ridwan Fataruddin, said he will propose a
number of conditions for the separation.

He declined to spell out his reservations, saying that he will
submit his proposal to the related ministries later this month.

The separation of the two airlines was initiated in 1989 by
Soeparno, then president of Garuda. After the separation, Garuda
as the country's flag carrier, will focus only on international
flights and Merpati will concentrate on domestic services.
Currently, Garuda still serves a number of domestic flights.

Ridwan contended that Merpati cannot yet make a profit because
it operates too many types of aircraft.

"Whoever handles Merpati won't be able to make it profitable
unless its fleet is reduced to only two or three types of
aircraft," Ridwan asserted.

Merpati presently operates 78 aircraft of eight different
types, including 17 Fokker F-28s, 14 CN-235s, 13 Fokker-27s, 11
Cassa 212s, nine Twin Otters, six Fokker F-100s, five ATPs and
three Boeing 737-200s.

Ridwan said operating eight types of aircraft sucks Merpati's
revenues for maintenance and spare parts dry.

"We cannot operate the aircraft efficiently," he concluded.
(rid)