Denied fuel by its principle supplier due to unpaid debts, domestic carrier Merpati Nusantara Airlines has stopped flying its Surabaya-Makassar route indefinitely, the company’s president director said on Saturday.
Sardjono Jhony Tjitrokusumo said the decision was made because the state-owned company could no longer obtain aviation fuel from state-owned Pertamina, which cut off the troubled airline on Saturday.
“Pertamina does not want to be infected by Merpati’s inefficiency,” Pertamina spokesman Mochamad Harun said Saturday. Harun claimed that Merpati owed Pertamina Rp 270 billion ($30 million) dating back to 2007.
“We don’t want Merpati’s inefficiency to become our burden,” Harun said. Sardjono said Pertamina has violated an agreement between the two companies to keep the fuel flowing while Merpati waited for an injection of cash from the government.
“Financially, Merpati is in trouble and we’re waiting for Rp 651 billion in government funds, as agreed upon in the revised State Budget 2011,” Sardjono said.
“We don’t have any other sources of income to cover the debt. I don’t understand why the supply was cut despite an agreement we made [with Pertamina] in front of the Assets Regulatory Body.”
As a result of the decision, at least 130 people bound for Surabaya were stranded at Hasanuddin Airport in Makassar on Saturday. The passengers were taken to a hotel to wait for a different Surabaya flight.
More routes could be interrupted, the executive said. Sardjono said the next step is up to Pertamina because his company had no money even to pay a current overdue bill of Rp 2 billion.
He said almost 90 percent of Merpati revenues are spent on fuel.
“In the past 18 months of new management, we haven’t received a penny from the government to help us,” Sardjono said. The best thing to help the long-suffering carrier would be a “total merger with national flag carrier Garuda,” he added.
Merpati’s troubles have included safety woes and corruption allegations in addition to its massive financial issues.
In May, a Merpati MA-60 turboprop plane crashed in Papua, killing all 25 people on board. Investigators blamed the accident on human error.
The incident highlighted the controversial purchase of 15 MA-60 planes from China, which former Vice President Jusuf Kalla and others said was overpriced.
When Merpati tried to back out of the 2006 deal for the planes, it became a source of tension between Beijing and Jakarta and was subsequently pushed through.
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