How do you solve a problem like Merpati?

So there has been good reason why hundreds of the carrier’s workers have been rallying outside the country’s State-Owned Enterprises Ministry in Jakarta. Their complaint is pretty straightforward: We haven’t been paid for eight months. Even more upsetting, they haven’t been paid their yearly Idul Fitri allowance, an annual bonus Indonesian workers hold close to their hearts. Idul Fitri, or Lebaran, is the celebration at the end of the holy month of Ramadan for those of the Muslim faith. This is a very special time for Indonesians where it is the custom to give gifts of money and clothing.

Although it is called a bonus it is not only customary but, by law, all employees are entitled to receive the equivalent of a full month’s salary as a yearly bonus at this time.

There won’t be any gifts of money or clothing for Merpati employees this year. “The State-Owned Enterprises Ministry is leaving us hungry and in trouble,” said workers’ spokesman Purwanto. “We only want to know when our salary, allowance and severance package will be paid. ” Right now, he’s not getting any answers. State-Owned Enterprises Minister Dahlan Iskan says he understands the workers’ problems but he can’t act on his own. There has to be a joint decision by the Finance Ministry and the House of Representatives. It’s what’s called passing the buck. In the meantime, unless the government is prepared to throw more rupees at Merpati, there doesn’t seem any likelihood of it making much money anytime soon. The carrier did actually close down for a week in February, suspending all flights as falling revenue continued to push it closer to bankruptcy. Suffering cash flow problems it was unable to pay for fuel. The carrier, which serves many of Indonesia’s remote areas, left passengers stranded. While it did manage to get back in the air it has been limping along ever since and appears to be approaching another crisis point.

Officially, Merpati has a fleet of 25: six Boeing 737s, five De Havilland Canada Twin Otters and 14 Chinese-built Xian MA60s (which it paid $14. 1 million each for in 2008, some $3 million more than similar purchases by carriers in the Philippines, Ghana and Nepal). It also has an order in for 40 of the Commercial Aircraft Corporation of China’s (COMAC) new regional jet, the ARJ21-700, although Beijing would have to be pretty optimistic to expect that to come to fruition.

So the real question is: why is Merpati still in existence? Jakarta already

Having three state-owned airlines appears a little bit of overkill.

has a state-owned airline, Garuda Indonesia, which flies internationally as well as domestically. Garuda also has a budget subsidiary, Citilink. And Garuda has the sort of metal that can serve Merpati routes. Its fleet includes 15 Bombardier CRJ1000 NextGen aircraft, with three more to come, as well as six ATR 72‑600s, with another 19 on order.

Having three state-owned airlines appears a little bit of overkill, particularly when one of them is a basket case. It is hardly likely that Garuda would want to absorb Merpati’s troubles. After several good years it is facing turbulence itself, reporting a loss of $211 million in the six months to the end of June, almost 20 times greater than its $10. 92 million loss in the same period a year earlier. It has put the brakes on expansion, canceling plans to launch two new international routes, from Jakarta to Manila and Mumbai and is delaying aircraft deliveries.

The government has been searching around for a buyer for Merpati for at least a year but, unsurprisingly, there have been no takers. It has even sold subsidiaries Merpati Maintenance Facilities (MMF) and Merpati Training Centre in an effort to keep it afloat. Worse, the airline has a dreadful safety record, having suffered five serious accidents since 2009, which has left it with a terrible reputation amongst Indonesia’s flying public.

Yet the latest development in this long-running saga is that the airline has just submitted a proposal to Indonesia’s commercial court for deferred repayment of its debts, owed to some 100 private and individual creditors. If it can achieve that it would come up with yet another rescue plan to submit to government. That, many believe, would amount to merely postponing the inevitable.

All in all, analysts are unanimous in the view that if Merpati can’t make a buck in a market that is growing at some 20 per cent annually, it simply shouldn’t be in business.