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Merpati Nusantara Airlines: Struggling to Survive

Government Intervenes in the Eleventh Hour to Save Merpati From Imminent Collapse.

Bali News:
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Promised badly needed cash injections from the Government, a change in senior management and a difficult decision to terminate nearly half of its employees are among the steps now being made to save PT Merpati Nusantara Airlines (MZ) from complete collapse.

On Wednesday, August 6, 2008, MZ's President Director Cucuk Suryo Surpojo and Operations Director Abbhy Widya were summoned to the Ministry of State-owned enterprises and summarily terminated from their positions. Cucuk was replaced by Bambang Bhakti, the former Director of the Jakarta International Cargo Terminal, while Abbhy's position was assumed by Captain Nikmatullah Rahmatullah Zaman. Also moving into key positions at MZ are Hotlan Siagian as the Director of Maintenance and Engineering, and Robby Eduardo Quento as the Airline's Director of Finance.

In announcing the management shake-up to the press, MZ's Corporate Secretary, Purwatmo, said the changes were being made to help hasten the current restructuring of the "critically ill" state-owned airline. "It is hope that the funds needed for restructuring will be made available in September 2008, allowing the restructuring to move ahead quickly," explained Purwantmo.

According to Bisnis Indonesia, the government will soon inject Rp. 300 billion (US$32.6 million) into MZ, with much of that sum to be used to pay the cost of golden handshake termination packages for 1,300 employees who will lose their jobs in the restructuring.

The decision to suspend nearly 50% of the MZ work force was made following a limited cabinet meeting with President Yudhoyono where it was determined that the airline could not survive with its current bloated payroll. Meanwhile, surplus pilots will be seconded by MZ to Garuda Indonesia which continues to suffer a shortage of qualified flight officers.

The restructured MZ will reportedly focus on serving "pioneer" routes to secondary destinations in Indonesia, primarily in Eastern Indonesia. In keeping with its route network, MZ will soon move its corporate headquarters from Jakarta to Makassar in Southern Sulawesi.

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[VP Kalla Calls for Urgent Reorganization of Merpati Airline]

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