Indonesian domestic carrier Merpati Nusantara Airlines has edged back into profit after two years of losses. The airline achieved a pre-tax gain of 97.9 billion rupiah ($9.79 million)in 1999, compared with a loss of 653.3 billion rupiah in 1998 and one of 417.7 billion rupiah in 1997.

Merpati was hard hit by the Asian economic crisis, with US dollar-based operating costs soaring after the collapse of the rupiah. The carrier's president, Wahyu Hidayat, attributes its recovery to "improved operations" and a debt- rescheduling programme.

That improvement parallels a return to profitability by flag carrier Garuda Indonesia last year after seven years of losses.

A third carrier, Sempati, became a casualty of the slump, folding in mid-1998.

Merpati has restructured 70 billion rupiah of its 1.7 trillion rupiah debt and is in negotiation with outstanding creditors, including shareholder Garuda, owed about $20 million for leases and maintenance, and aircraft manufacturer IPTN, owed about $10 million for leases.

At one point, Merpati's load factor dropped below 40%, but began to recover in the second half, returning to over 70%. The carrier has cut its fleet from 90 aircraft to 76, but operates only about 34.

Merpati claims it is considering the acquisition of Airbus A318s and A320s, ahead of a market resurgence, but cannot say when.

Source: Flight International