Merpati to lease two routes

JAKARTA (JP): State-owned airline Merpati Nusantara Airlines plans to lease its Denpasar-Perth and Denpasar-Melbourne routes to Orient Thai of Thailand.

Merpati spokesman Tondo Widodo said here yesterday Merpati could no longer serve the two routes because it had returned the Airbus-310 jets it used for the destinations to its lessors.

The Thai airline, under a wet-lease agreement to be signed soon, will serve the routes with Tristar L-1011 planes.

Merpati returned 17 of its leased planes, including three Airbus-310 jets, to its foreign lessors late last month as part of cost-cutting measures to survive the current sluggish market in the airline industry.

The other 14 planes the airline returned were three F-100s, one BAe-146 and 10 F-28s.

Merpati offers flights on its Denpasar-Perth and Denpasar- Melbourne routes three times a week.

Tondo said talks with Orient Thai over the wet-lease were proceeding well and that he expected an agreement to be finalized early next week.

"Hopefully we can sign a wet-lease agreement with Orient Thai next week," he said.

Under the agreement, Orient Thai would provide the aircraft, crew, maintenance and insurance (ACMI) for the two routes.

Tondo declined to mention the value of the contract, but said it would be cheaper than leasing the Airbus-310 jets it had once used to serve the routes.

Merpati had been paying US$420,000 a month in installment payments for each of its Airbus-310 jets.

Such lease agreements denominated in dollars have been too expensive for the country's airlines to continue since part of the industry's revenues are made in rupiah, which has fallen 80 percent in value against the U.S. dollar.

He said the country's airline operators were now fighting to survive and that most carriers would have to slash costs by selling planes, cutting routes and returning leased planes.

"We have to do it to survive the crisis," he said.

He said Merpati, which focuses on the domestic market, suspended flights on its Jakarta-Yogyakarta, Jakarta-Semarang, Jakarta-Medan and Jakarta-Singapore routes last month.

The company also cut its Jakarta-Pontianak flights to three times a week from six times a week, its Jakarta-Palembang flights to four times a week from six times a week, its Jakarta-Bandung flights to three times a week from nine times a week and its Jakarta-Tanjung Karang flights to three times a week from eight times a week.

"Even these measures may not help the company much," he said. (aly)