Indonesia's state-owned carrier Merpati Nusantara and China's Xian Aircraft appear to be on track to resolve their differences with regards to an order for Xian Aircraft MA60 aircraft.

Merpati ordered 15 MA60 turboprops in 2006 and received the first two in August 2007 but it failed to take delivery of the others because the loss-making state-owned airline encountered problems getting financing for the purchase.

The airline also discovered a crack last year in the vertical stabiliser of one of its MA60s, say industry sources. A senior Merpati official, who wishes to remain anonymous, says the MA60 with local registration PK-MZC had "a very small crack" in the vertical stabiliser.

But he adds: "It has already been resolved and we don't have that problem any more because the Chinese changed that part of the stabiliser."

Merpati's other MA60, local registration PK-MZA, has so far avoided having to undergo the same modification but the aircraft is under close watch, says the official. The crack in PK-MZC was due to problems with materials rather than a design issue, he says.

Even though PK-MZC has been worked on, it and the other MA60 remain grounded.

"The aircraft are not flying because the Xian Aircraft factory won't support us with full maintenance," says the Merpati official.

Xian Aircraft put some spares on board the first two aircraft that were delivered and the Chinese firm has three maintenance engineers stationed in Bali, Indonesia to assist Merpati, he says.

But Xian Aircraft has refused to provide further spares, says the official. This is because of the dispute over financing for the aircraft, adds the official.

China was originally planning to provide financing for the 15-aircraft deal but now Indonesia, in an effort to overcome the impasse, has agreed to step in and finance the aircraft, says the Merpati official.

China has agreed to provide financing for a number of major infrastructure projects in Indonesia, so in return, Indonesia's government has agreed to finance the aircraft deal, adds the official.

He says Merpati now hopes to take delivery of the third and fourth MA60 in May or June of this year.

Xian Aircraft officials were either unavailable or unable to comment on the latest negotiations when contacted.

But one of the Xian officials says that "if Merpati cancels the deal, it will be a high loss to Xian Aircraft".

Xian Aircraft already has a significant number of MA60s painted in Merpati livery and parked at Yanliang airport, where Xian Aircraft is based, adds the official.

Source: Air Transport Intelligence news