22-8-2023 (JAKARTA) The Indonesian government is currently reviewing a proposal to merge the state-owned airlines Garuda Indonesia and Pelita Air, a subsidiary of energy firm Pertamina. The aim of the merger is to ensure affordable airfares for the public, according to an executive statement on Tuesday.
This plan comes one year after Garuda reached an agreement with its creditors to restructure its substantial $9 billion debt. Pelita Air’s President Director, Dendy Kurniawan, expressed support for the proposed merger, stating that it is currently under review by Indonesia’s State-Owned Enterprises (SOE) ministry. Kurniawan believes that the merger has the potential to “strengthen the aviation industry” and maintain affordable ticket prices.
The statement follows reports in local media citing SOE Minister Erick Thohir, who announced his intention to merge Pelita Air with the Garuda group, which includes the low-cost airline unit Citilink.
Thohir emphasized that the merger would contribute to reducing the country’s logistic costs and increasing the fleet size, which he estimated to require an additional 179 new planes.
According to Garuda’s website, the airline operated 101 planes as of June. In contrast, Pelita Air currently operates 7 planes, as confirmed by its CEO.
Garuda’s CEO, Irfan Setiaputra, stated in a release on Tuesday that the airline is still in discussions regarding the proposed merger.
