Merpati (Jakarta Soekarno-Hatta) will likely be bailed out by the Indonesian government after the country's Coordinating Minister for Economics, Chairul Tanjung, said allowing the carrier to go bankrupt would prove far more costly.
Tanjung told the Antara News agency in the capital Jakarta that a inter-departmental committee would soon present its findings into a possible solution for the airline's debts, which are said to amount to more than IDR6.7trillion (USD549million).
"Several scenarios have already been prepared, which include converting the government's debt into its capital. We have not yet taken a decision on this, but it is still a mere option. It will all depend on the results of the working committee meeting," he said.
Jakarta ceased extending Merpati loans in February this year forcing the airline to suspend services. The Indonesian Ministry of Transportation subsequently froze the airline's Air Operators Certificate (AOC).
As part of restructuring plans, subsidiaries PT Merpati Maintenance Facility and PT Merpati Training Centre will be spun off from its parent.
