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)