Monday, February 20, 2012

Merpati Airlines Aims to Make a Profit This Year

It may be heavily burdened with debt and known for its checkered safety record, but state carrier Merpati Nusantara Airlines says it can turn a profit this year by more than tripling the number of passengers it carries.

And its growth plan extends through the next seven years, during which it will take possession of 40 new aircraft following a deal it struck last week.

Sardjono Jhony Tjitrokusumo, the airline’s president director, mapped out the beleaguered carrier’s targets on Monday in Jakarta. It is shooting for a Rp 67 billion ($7.4 million) profit, with revenue to grow 200 percent to Rp 3.6 trillion.

Such a result would be an impressive turnaround given the airline is estimated to have lost Rp 146 billion last year, according to state asset-management firm Perusahaan Pengelola Aset.

A massive surge in passenger numbers is central to the carrier’s goal. Sardjono said the airline was aiming to carry 5.5 million commuters this year, up 260 percent on 2011.

The “golden year” predicted by Sardjono follows four challenging years for the carrier. From 2008 to 2011, PPA guided a debt restructuring at the airline. Last November, the government injected Rp 561 billion to keep it afloat, following a commitment by Sardjono to trim staff and cut costs in an effort to improve its efficiency.

To meet the passenger goal, Merpati will be increasing its fleet to 36 airplanes, from the current 25, with the addition of 11 new Boeing B737-400s.

Later in the decade, the airline will be taking delivery of 40 Chinese ARJ21-700 aircraft, which can each accommodate 100 passengers. The airline is set to progressively bring them into operation between 2013 and 2018.

Sardjono said that the ARJ21-700, although assembled in China, would have 40 percent of its metal content produced by state-owned aviation firm Dirgantara Indonesia in Bandung.

He said that the deal for the Chinese airplanes had been clinched at an airshow in Singapore last week.

Sardjono acknowledged that at present, Merpati had “negative equity, liquidity and cash flow,” but he added that there were no other airlines capable of flying to the isolated destinations it serviced.

Iskandar Abubakar, the Transportation Ministry inspector general, said the new aircraft should reinforce Merpati’s capability to serve lightly trafficked routes, especially in eastern Indonesia.

“Although Merpati also wants to serve western Indonesia, we are asking Merpati to focus on servicing pioneer routes in eastern Indonesia, because at present only Merpati is capable of reaching them,” Iskandar said.

Last year, Merpati provided services between more than 25 domestic destinations, with hubs in Jakarta, Denpasar and Surabaya, as well as international flights to East Timor, Malaysia and Papua New Guinea.

Its fleet also includes Fokker 100s, Twin Otters, Cassa C-212s and MA-60s.

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