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A Crisis of Confidence

Minister of State-Owned Enterprises Questions if the Man Just Named to Head Merpati Nusantara Airlines is Up to the Job

(5/27/2012) Just days after replacing the CEO of State-owned Merpati Nusantara Airlines, the Minister for State-Owned Enterprises Dahlan Iskan is now openly questioning if Rudy Setyopurnomo, the new man he selected to run the troubled airline, will be capable of handling the job.

As reported by Balidiscovery.com the sudden change in top management at Merpati has precipitated threats of a strike by the airline’s senior pilots, the resignation or at least 8 top members of the Company’s management, and raised widely publicized questions as to the legality of the manner used by the Minister to revamp the management structure.

Speaking to The Jakarta Post, Dahlan expressed his lack of faith in Setyopurnomo, saying: “I doubt he can handle the problems in Merpati, especially the losses of Rp. 2 billion (US$216,000) daily.”

Merpati lost RP. 251 billion (US$27.3 million) in Q1 of 2012, up from Rp. 106 billion lost in the same quarter in 2011.

“I am not sure we can reduce those losses and perhaps the (losses) figure has even increased by now,” Dahlan added.

Saying the company needs good leadership that is intelligent, suggesting that only a major change in game plan can rescue the ailing airline.

Merpati currently operates a fleet of 29 aircraft including nine Boeing 737s, three DHC-6s, two Casa C-212, 14 MA-60s and one Fokker-100.

The airline has outstanding debts to the State-owned oil company Pertamina for fuel amounting to Rp. 264.2 billion (US$28.7 million).

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