JAKARTA Jan 29 Indonesian state-owned energy
company Pertamina will only supply jet fuel to debt-laden PT
Merpati Nusantara Airlines if it pays in cash, throwing into
question the airline's ability to remain operational.
Merpati has twice breached its maximum debt limit allowed by
Pertamina and now owes around 165 billion rupiah ($13.5
million), the oil and gas company said in a statement late on
"The maximum debt limit commitment was breached again, which
shows that there has not been an improvement in the debt payment
efforts," Pertamina said.
Merpati has had to pay for jet fuel in cash from Jan. 15,
the company added.
Merpati had total debt of more than 6 trillion rupiah
($492.2 million), owed to Pertamina as well as other companies
including airport operators PT Angkasa Pura I and PT Angkasa
Pura II, local media reported late last year.
The Indonesian government tried last year to sell the
struggling state-owned airline to strategic investors and is
currently overseeing a restructuring of its operations.
Merpati, which has also seen a change in management, mainly
plies domestic routes to the eastern regions of Indonesia.
Merpati was Indonesia's seventh largest domestic carrier by
seat capacity, industry consultancy CAPA said in November. Its
troubles show how smaller airlines in Asia are finding it hard
to operate in an extremely competitive market.
($1 = 12,190 rupiah)
(Reporting by Eveline Danubrata in JAKARTA; Additional
reporting by Anshuman Daga in SINGAPORE; Editing by Tom Hogue)