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Flights Not Fancy

Merpati Nusantara Airline Closing 10 Air Routes in Pursuit of Profitability


Bali News: Flights Not Fancy
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(6/27/2012)

State-owned Indonesian airline Merpati Nusantara has announced plans to close 10 of their 124 air routes in order to reduce the massive losses being sustained by the troubled carrier.

As reported by Bisnis.com, Merpati is targeting to achieve 90% passenger load factors on its flights in order to move from losing money on a daily basis to posting a profit of Rp. 500 million (US$53,750) per day.

Over the past 5 years Merpati claims they have suffered an average daily loss of Rp. 1.5 billion per day (US$161,300).

The newly appointed CEO of Merpati Nusantara Airlines, Rudy Setyopurnomo, confirmed the closure of 10 air routes, including Jakarta via Halim Perdana airport to Bandung and Jakarta to Pangkal Pinang.

“For the route Jakarta-Bandung the plane has a capacity of 56 passengers, but they carry only 2 passengers. This has gone on for months causing continuous losses,” said Rudy on Monday, June 25, 2012.

The airline boss confirmed that 10 routes have been closed and more closures may follow. He emphasized that for routes flown to Eastern Indonesia such as Merauke, Jayapura and Sorong will continue to operate together with pioneering routes.

Earlier, Rudy had projected that between 10-20% of the routes operated by Merpati may eventually be closed. He remains optimistic that within six months Merpati will be able to net a 15% profit from its total income. He said that Merpati is targeting sales of Rp. 2-3 trillion by the end of 2012, an increase of 42% from 2011 when the airline had sales of Rp. 1.6 trillion (US$172 million). Of that total income 80% came from commercial route operations with the balance from pioneer routes to remote areas of Indonesia.

Rudy said Merpati was currently achieving an 86% load factor.

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