News
Merpati on the edge - again
September 1st 2013
Struggling Indonesian domestic operator, Merpati Nusantara Airlines, is up for sale, but even its government owners think there is little interest in the debt-mired airline.Read More »
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| Merpati Airlines: Is it the end? |
“Its debts stand at Rp6 trillion (US$600 million). I will continue to offer it for sale, but up to this day no investors have shown any interest. My estimate is that no one will,” said state enterprise minister, Dahlan Iskan.
He gave potential investors until this month to make offers. If no buyers are found it’s likely Merpati will finally close its doors following five years of heavy losses.
The carrier has been unable to counter increasing competition in the domestic market from rivals such as Lion Air and CitiLink, the low-cost subsidiary of also government-owned, Garuda Indonesia.
The government has made repeated attempts to rescue Merpati, including the injection of funds, streamlining its workforce, moving its headquarters and restructuring its debt with local private creditors. In December 2011, it pumped $54.4 million into the carrier, but a second bail-out of $24.3 million due in 2012 was held back.
Merpati owes money to several state-owned firms, including oil company, Pertamina and airport operators Angkasa Pura I and II.
The carrier’s latest crisis was in June when one of its Chinese-built MA60 aircraft crash landed at El Tari airport in Kupang. Five people were seriously injured.
