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Friday, June 1, 2012

Batavia Air - In trouble? (Part 2)

Differences in claimed facts only point to trouble
Amidst chasing up on sources behind the scenes to follow up on what I wrote "Batavia Air - In trouble? (Part 1)", the Jakarta Post yesterday published this: "Batavia Air airplanes to be repossessed.

According to the Jakarta Post article, the DGCA has received notice that 2 leasing companies plan to take back 2 737s from Batavia, citing that if Batavia Air could not settle its financial obligations immediately, the 2 jets would be repossessed and it would impact on its operations.

Batavia Air understandably, denied allegations that the company was in financial distress. "That's not the reason the lessor plans to take our aircraft," according to the company spokesperson. She did however, said that 2 A320s and 2 737-400s would be returned to the lessor, in accordance to the company's plans to reduce its fleet, in order "to balance the number of human resources such as pilots and crew members with the size of the fleet". The operations director, Herman Santoso, however, hinted at another reason, that Batavia was still negotiating the lease prices with the lessor.

So, Batavia itself gave out 2 different versions of the story in one go

PK-YVF seen in Singapore recently with Batavia markings removed
(Photo by: Dikavector / Indoflyer)

The second A320 can now be identified as PK-YVH thanks to this photo
(Photo by: Dikavector / Indoflyer)
Well, first of all, maybe the company spokesperson could be a little more up to date with the fleet numbers. We know that 2 A320s have been taken off the operational fleet since 16th May, as the two aircraft was seen in Singapore with Batavia Air titles removed. One of those aircraft is PK-YVF. We know that one of the 737-400s (PK-YVQ) was seen in Honolulu on 20th May on the way back to mainland USA, and that the aircraft was already re-registered as N594AB. 

To me, their answer points to "potential trouble brewing but being kept under the lid." Of course, what airline would admit that their planes are being repossessed? But repossessed or not, their fleet numbers will reduce.

Sources contacted are still pointing towards problems, but to varying degrees. One key person within Batavia, reportedly is resigning, but which key person, it is not yet known. I guess this remains as a mere rumour for the moment.

Over the past week, some travel agents have also reportedly seen an increase of refund requests from Batavia passengers. This is reportedly due to an increased number of published scheduled flights not operating, and that the refund process is now made "more difficult."

It is also suspected that Batavia has now stopped flying to Bandar Lampung (TKG), or have severely reduced its frequencies there. One agent in east Jakarta have complained a flood of requests for full refunds for passengers ticketed to that city.

Travel agents are reportedly more reluctant top up their account balances with Batavia used to pay for passenger tickets. The top up balance for Batavia has also increased from 10 million Rupiah ($1100) to 15 million Rupiah.

More on the A330 problems
All Umrah schedules are reported being moved forward because the A330s are rumored to be leaving the airline soon, which means Batavia Air will have no aircraft to serve Jeddah with. But this might actually be a good thing for Batavia. Their A330 ops appears to have been a financial disaster, or a maintenance program disaster. 

The A330s are used for the Jeddah flights which has had problems, the most recent two published on the media was last in March, where maintenance issues caused passengers to wait for 4 (four) days to get the aircraft fixed. On the 3rd day, the passengers went to the airport for a 630pm departure back to Jakarta, but after 4 hours inside the aircraft, they were asked to disembark, and they left the next day. 

The other case was reported a week later, the same thing occured again, with some passenger groups have been waiting for 5 (five days) in Jeddah, thanks to the Batavia delays on its Jakarta-Jeddah flights, followed by another case 2 days later where the passengers leaving Jakarta to Jeddah, had waited overnight due to the knock on delays, and Batavia had to get a replacement aircraft, reportedly from Orient Thai, and that aircraft too broke down causing more delays. After more than 48 hours wait, the passengers decided to have a demonstration at the boarding gate demanding explanation from the airline.  
(I've seen one of these, in February on the way to the Singapore Air Show. Umrah passengers were sitting in the airside terminal after immigration, demanding assistance from the airport because of uncertainty when their Batavia flight to Jeddah was going to depart. I thought it was a once off, I was wrong I guess.)

On the domestic front, remember the story of the passenger who covered for the delay compensation? Well, I guess "delay" and Batavia Air go hand-in-hand these days (despite having the 3rd best OTP in Indonesiafor January-November 2011). On Tuesday 29 May, another Batavia Air flight, from Pontianak to Jakarta, resulted in passengers crowding the Batavia ticket counter at the terminal demanding their delay compensation after over 4 hours of delays. Interestingly, the Pontianak general manager of airport operator Angkasa Pura II, who said that delays are happening more frequently with Batavia.

Whatever the problem is, there s a problem.
So, pilot shortage? Maybe... where did all their foreign pilots go? Why such a perceived jump in delays this year? Financial problems? Maybe... The questions go on and on...

My biggest clue perhaps is based on the Operations Director's comment at the Jakarta Post. Negotiating the price? Are these 4 planes reported to have left Batavia have their leases due for renegotiation? Perhaps someone should call Wells Fargo Bank or CIT Leasing?

The most interesting development however, was today where Batavia announced that it would immediately get 5 A320s to replace 4 aircraft that left the fleet. So, 24 hours after they stated that 2 would go (and none left), they suddenly admit that 4 have left. But remember the Jakarta Post article on the 30th, where the Director General for Air Transportation, Herry Bhakti Gumay, said that if Batavia Air could not settle its financial obligations immediately, the two jets would be repossessed and it would impact its operations. Let me emphasize on the words financial obligations, which does not match the "upbeat" press release of getting 5 replacement aircraft.

I'll guess we just have to wait and see what will happen with Batavia Air. My thoughts are with those working at the airline, some of whom, are understandably concerned.

1 comment:

  1. Before crisis, Batavia had 36 a/c. Could Batavia survived this crisis? Adam and Mandala had fewer total a/c just before the crisis. Unless Batavia running out of cash as you wrote before.