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Indonesia's Merpati grounds flights as debt woes mount

Published on Feb 4, 2014 4:03 PM

JAKARTA (REUTERS) - Indonesia's PT Merpati Nusantara Airlines has grounded all flights until at least the end of February as the debt-laden state-owned airline struggles to pay for fuel, insurance and salaries, company officials said.

Angry customers were demanding refunds for cancelled flights in Merpati's central Jakarta office on Tuesday and workers said they have not been paid for three months.

Merpati has reduced its routes to cut costs, but it is straining under a debt of more than 6 trillion rupiah (S$600 million).

All of Merpati's route permits have been suspended until the end of February, but the airline will resume flights when it is ready, operational director Daryanto said, without giving a specific timeline.

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