Jakarta. Mandala Airlines announced on Wednesday that it would stop operating from July 1 due to the increase in operating costs and the weakening rupiah.
Management decided to take a difficult decision to halt the airlines’ operation because of market conditions and the increasing operational cost due to the rupiah’s depreciation, said Jusman Syafii Djamal, head of Mandala’s board of directors.
“We have tried to find the solution to stay operating including conducting discussions with potential partners and investors,” Jusman said in a written statement released on Wednesday.
Jusman said the airline has been dealing with many problems including handling capacity, which has far exceeded the limited number of passengers and the fact that the rupiah has weakened by 20 percent against the dollar since the beginning of 2013. Expenses in dollar include jet fuel purchases.
Jusman said that after resuming operation in April 2012 Mandala kept losing money. He said the overwhelming challenges in the aviation industry has failed to convince shareholders to continue supporting the airline.
He said the shareholders believed the airline did not have the sufficient resources to keep operating.
“The airlines has officially released the information about the end of the operation on July 1st, 2014 to the directorate general of transportation,” he said.
Jusman said the last flight to be handled by Mandala would be from Denpasar to Hong Kong and all flights scheduled after that would be canceled.
He said Tigerair Group would help Mandala to take over the passengers who have booked the flights Mandala and to refund the ticket.
Jusman said passengers who needed more information could visit Tigerair’s official website or call Mandala’s call center at (+6221) 2939-6688, or Tigerair’s call center from June 18 to July 31.
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