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Merpati Harus Mati?

Government Not Prepared to Bail Out State-Owned Airline Merpati Nusantara

(2/3/2014) The Coordinating Minister for the Economy Hatta Rajasa has said it will be difficult for the Indonesian government to bail out State-owned airline PT Merpati Nusantara with debts now totaling Rp. 6.7 trillion (US$536 million).

Quoted by Bisnis.com, Hatta said on Thursday, January 30, 2014: “Please discuss this internally first, then bring it to a ministerial coordinating meeting. For me, that coordinating meeting will review the business plan. If the plan (for recovery) makes no sense, close it (the airline).”

Hatta said the government was, nonetheless, still prepared to give Merpati a chance to rebuild and finalize its internal problems and the problems of its affiliate companies.

On Wednesday, January 22, 2014, Merpati appointed PT Bentang Persada Gemilang and PT Amagedon Indonesia as operational partners and eventual investors in the effort to restore the airline’s business momentum.

Indonesia’s Minister for State-Owned Enterprises, Dahlan Iskan, said the partnership with the two private firms would allow the creation of a new subsidiary called PT Merpati Aviation Service. The new company will handle the business recovery plan for Merpati prepared by the PT Bentang Persada Gemilang and PT Amagedon Indonesia.

Dahlan confirmed on January 28, 2014, that Merpati is in the process of separating itself from two of its subsidiaries - PT Merpati Maintenance Facilities (MMF) and Merpati Training Center.

Dahlan explained that control of MFF has been assumed by PT Perusahaan Pengelolaan Aset (PPA) – the State-Owned Asset Administration company, tasked to seek an investor or purchaser for MFF.

In recent weeks, cash shortages at Merpati have necessitated the temporary cessation of a number of air routes. Pilots, aircrew and other employees of Merpati have also reportedly not received their wages for several months.