Merpati to fly to Jeddah, Taiwan and Hong Kong

Merpati to fly to Jeddah, Taiwan and Hong Kong

JAKARTA (JP): State-owned air carrier Merpati Nusantara
Airlines will expand its overseas services to Jeddah, Hong Kong
and Taiwan this year, the airline's president, Wahyu Hidayat,
announced on Monday.

"We are currently seeking landing rights from the Saudi
Arabian government, and will initially provide charter flights to
serve the new route " he said at a ceremony to commemorate the
airline's 37th anniversary.

He said due to increasing numbers of Indonesian nationals
working in Saudi Arabia, flights to Jeddah would be much more
lucrative than those to Hong Kong and Taiwan.

Wahyu said Merpati would also provide regular services to Hong
Kong and Taiwan to tap the growing market of Indonesian tourists
visiting the two destinations.

"Hopefully, we will start serving Jeddah, Hong Kong and Taiwan
by the end of the year."

The three new routes will increase Merpati's overseas services
to six. Merpati currently has flights from Kupang to Darwin in
Northern Australia, Jakarta to Kuala Lumpur in Malaysia and
Denpasar to Port Hedland in Western Australia.

Merpati's senior vice president in the commercial division
Yoyo Basuki said an expansion in regional and international
routes would compliment the airline's core business as the
country's dominant domestic operator.

He said the airline had been more selective in serving
domestic routes in order to cut operational costs.

"We are more focused now. Profitable routes are our main
target, and we will not hesitate to close unprofitable routes."

The new approach, however, would not eliminate Merpati's
obligation as a state-owned company to provide flights to remote
areas which were less profitable, he said.

Wahyu said the opening of new overseas routes and efficiency
measures carried out in serving the domestic routes were expected
to help Merpati recover from the financial crisis.

The company has suffered financial problems for several years
with a drop in income and increasing expenses. The country's
economic crisis since late 1997 additionally forced Merpati to
reduce flights and fleet capacities.

Currently the airline serves 269 routes, using 29 aircraft,
compared to 344 routes with between 60 and 90 aircraft before the
economic crisis hit hard.

The cutback in flights has raised the airline's average load
factor to 70 percent, from about 40 percent late last year.

He said the airline was currently negotiating its debts worth
Rp 1.7 trillion to overseas vendors, leasing companies, repair
centers and maintenance support providers.

He said about Rp 700 billion of the total debts had been
restructured either through a debt reduction or an extension of
their maturity period.

Wahyu said he was upbeat Merpati would soon be able to settle
its debt problems, attributing the optimism to the positive
support given by creditors to the airline's efforts on debt
settlement negotiations.

He said Merpati was expected to further recover this year to
post about Rp 886 billion in profits. The company forecasts
further growth next year of about 1.4 million. (cst)