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Will Merpati Airline Fly Again?

Last Ditch Efforts Underway to Resurrect Debt-Ridden Merpati Nusantara Airlines
NusaBali reports that plans have re-emerged to restart the long-defunct government-owned Merpati Nusantara Airline.

PT Merpati Nusantara Airline was established in 1962 as the second state-owned airline after Garuda Indonesia serving, at its peak, a route network of 25 domestic destinations and several international regional flights.

In February 2014, Merpati Nusantara ceased operations when pilots and crew, unpaid for the past three months, refused to report to work. Unable to pay its bills and with debits estimated at Rp. 10.7 trillion, the company was formally declared closed by the Ministry of Finance in July 2014.

The latest plans to revive the brand and the airline are reportedly being eyed by new investors eager to tap into the airline’s operating licenses and permits. Henry Sihotang, the CEO of PT Perusahaan Pengelola Aset, the state owned asset-management company, said on Saturday, May 26, 2018, that several domestic investors have expressed an interest in acquiring the company.

Sihotang has reportedly given the investors until 4 June to make a formal acquisition proposal to the Government to relaunch Merpati Nusantara. If the proposal is considered viable and capable of repaying the Rp. 10.7 trillion in accumulated debt, the acquisition could obtain the needed government approval.

Outstanding debt owed to employees in unpaid wages and benefits total Rp. 461billion.

If, however, by mid July 2018 no viable option for restarting the airline is in hand, the company will be written off the books as a State-owned enterprise and cease to exist.

Meanwhile, the Minister for State-owned Enterprises (BUMN), Rini Soemarno is seeking means by which to deal with the large number of loss-making companies owned by the Republic.

Among the loss-making companies owned by the Government are: PT Garuda Indonesia, PT Krakatau Steel, PT Kerta Leces,), PT Dirgantara Indonesia, and PT Merpati Nusantara Airlines (Persero). "

Rini Soemarno calculates the total losses of BUMN companies in 2013 total Rp. 13 trillion. In 2016, losses were reduced to Rp. 5 trillion and Rp. 4 trillion (estimated) in 2017.

In the current year, Rini Soemarno estimated both Garuda Indonesia and Krakatau Steel would suffer losses of Rp. 1 trillion each. The Minister blames Garuda’s losses is due to intense competition in the airline sector and Krakatau Steel’s losses on product dumping of steel products by Mainland China.

Soemarno said the government had targeted to have no loss-making BUMNs in opration in 2018.