Sempati closes dozens of regional routes and offices

JAKARTA (JP): Private airline PT Sempati Air will terminate 14 domestic and regional routes and 15 representative offices beginning on Sept. 1 as part of the company's restructuring plan.

Sempati's spokesman Riza Iskandar told The Jakarta Post here yesterday the flight terminations would continue until the airline showed improvement.

"We are still preparing the new fleet plan," he said.

Sempati is one of the country's six scheduled airlines. The airline is currently on a major restructuring plan which will also cut the number of its employees.

The airline operates 25 aircraft, five Fokker F-27s, seven F- 100s, seven Boeing B-737-200s, two F-70s and four Airbus A-300- B4s.

The company planned to order 10 United States-made Beechcraft passenger aircraft but the proposal to use the airplanes was turned down by the government.

In the meantime, Sempati can not operate its five Fokker-27s after the government temporarily banned the aircraft from flying following an accident last month.

Company president Santun Nainggolan said recently that Sempati was expected "to return" to its core business and improve performance ahead of its plan to go public next year.

The airline delayed its plan to float shares on the Jakarta Stock Exchange last year for unknown reasons.

Iskandar said that beginning Sept. 1, Sempati would stop routes from and to Ampenan (West Nusa Tenggara), Ambon (Maluku), Bandung (West Java), Banjarmasin (South Kalimantan), Dili (East Timor), Kendari (Southeast Sulawesi), Kupang (East Nusa Tenggara), Padang (West Sumatra), Palangkaraya (Central Kalimantan), Semarang (Central Java) and Tarakan (East Kalimantan).

"Flights to and from Kuala Lumpur and Penang in Malaysia will also stop by the end of August, while service to Taipei in Taiwan was halted earlier this month."

Sempati will continue services to 15 other destinations but close its offices in Denpasar (Bali), Surabaya (East Java), Batam (Riau), Balikpapan (East Kalimantan), Jayapura and Timika (Irian Jaya), Yogyakarta, Manado (South Sulawesi), Pekanbaru (Riau), Surabaya (East Java), Surakarta (Central Java), Ujungpandang (South Sulawesi), Medan (North Sumatra), Singapore and Perth.

Ticket sales in the cities have been handed over to local sales agents, he added.

Sempati booked Rp 753 billion in sales last year, up 15 percent from 1995. Recently, the rating agency Pefindo said late last year it was reviewing the airline's rating outlook because of worsening liquidity.

Sempati was established in 1968 and began scheduled commercial flights in 1990. The company's current shareholders include the Humpuss Group of Hutomo Mandala Putra, President Soeharto's youngest son, Armed Forces holding company PT Tri Usaha Bhakti, Malaysian-Indonesian joint venture Asean Aviation Inc. and timber tycoon Mohammad (Bob) Hasan, one of the President's closest friends.

The company's current assets are estimated to reach Rp 1 trillion (US$357 million) with debts reaching Rp 600 billion, partly to the state-owned Pertamina for unpaid aviation fuels. (icn)