Financial difficulties crush Mandala

INDONESIA’s Mandala Airlines has run into financial difficulties and is halting all operations from today.

The announcement has caught the travel trade by surprise, as the airline appeared healthy, expanding regionally last year with services from Jakarta to Singapore, Hong Kong and Macau, and from Balikpapan to Singapore.

Agents are worried they will not be able to withdraw their deposits – some with up to 200 million rupiah (US$22,220) – with Mandala.

“Many of the affected agents are medium-sized ones who work together with Mandala to create group and incentive tours with cheaper fares,” said Indonesia Ticketing Agents Association board member Rudiana. “Some of them have already confirmed bookings.”

Quizzed on the association’s plan of action, Rudiana said it was still too early to tell. “We are still collecting information from our members, but I hope the airline will pay them their dues,” he said.

Mandala president director Diono Nurjadin said the airline was in negotiations with investors to resolve its financial situation. “Some investors have shown an interest in buying Mandala’s shares, but we are unable to name them right now,” he said.

Nurjadin also said it should not be long before the airline would operate normally again, and promised that Mandala would give “fair” refunds to passengers.

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