Merpati to lease two routes

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)