"In the consolidation period, Marpati is forced to halt its flight service temporarily. If it flies it will suffer more losses," State Enterprise Minister Dahlan Iskan said.
Jakarta (ANTARA News) - State-owned airline Merpati Nusantara Airlines has temporarily shut down its operation in the face of its consolidation period, according to a cabinet minister.

"In the consolidation period, Marpati is forced to halt its flight service temporarily. If it flies it will suffer more losses," State Enterprise Minister Dahlan Iskan stated here on Tuesday.

The minister said that if Merpati forced itself to operate, particularly its jet planes, it would increase its losses.

He said that the temporary closing of flight routes was a consequence it had to take during its restructuring and consolidation period.

"It is only for the time being. We hope consolidation will have been completed at the end of March at the latest," the minister remarked.

Marpatis conditions became worsened as a result of corporate cash deficit, the closing of a number of flight services, insurance payment arrears and delay in employees salary payments.

The state-owned airlines which is now burdened with debts amounting to Rp6.7 trillion has been carrying out restructuring since 2005.

It has spent Rp3.6 trillion for its salvaging efforts.

Chief Economics Minister Hatta Rajasa has said it is difficult for the government to advance more money to ailing Merpati to pay for its Rp6.7 trillion debts.

"Please discuss internally first and then bring the results to a coordination meeting, to see its business plan. "If it is illogical, well, just close it," Hatta said here on Thursday.

MNA has failed to repay debts to a number of financiers including state lender Bank Mandiri and the government itself.

The government, however, still gives an opportunity for the airline to rise and settle its internal problem, Hatta said.

Last week, PT MNA named PT Bentang Persada Gemilang and PT Amagedon Indonesia joint operation partners as investors and to improve the performance of the airline.

Minister for state enterprises Dahlan Iskan said the debt ridden airline would form a new subsidiary PT Merpati Aviation Service.

"Merpati Aviation Service will carry out all business expansion plan prepared by the two joint operation partners," Dahlan said.

Last Tuesday, Dahlan said the management of PT MNA is in the process of divesting subsidiaries PT Merpati Maintenance Facilities (MMF) and Merpati Training Center.

He said the management of PT MNA has decided to allow MMF to be taken over by state-owned asset management company PT Perusahaan Pengelolaan Aset, to seek investors.

MNA has a big fleet to serve domestic flights including pioneer flights to isolated areas mainly in eastern Indonesia.(*)

Editor: Heru Purwanto
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