REPUBLIKA.CO.ID, JAKARTA - State-owned airline Merpati Nusantara Airlines has temporarily shut down its operation in the face of its consolidation period.

"In the consolidation period, Marpati is forced to halt its flight service temporarily. Otherwise, it will suffer more losses," State Owned Enterprise Minister Dahlan Iskan stated recently. 

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.

Marpati's conditions 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 airline which is now burdened with debts amounting to 6.7 trillion IDR has been carrying out restructuring since 2005. It has spent 3.6 trillion IDR for its salvaging efforts.

Chief Economics Minister Hatta Rajasa has said it was difficult for the government to advance more money to ailing Merpati to pay for its 6.7 trillion IDR 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 earlier.

MNA has failed to repay debts to a number of financiers including state lender Bank Mandiri and the government itself. The government, however, still opened 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. While minister Dahlan Iskan 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.

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