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Govt to merge three state-owned airlines
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Touching down: A Garuda Indonesia Airbus A330 lands at Sultan Iskandar Muda International Airport in Blang Bintang, Aceh, on July 13. (AFP/Chaideer Mahyuddin)
S
tate-Owned Enterprises (SOEs) Minister Erick Thohir has said he plans to merge the country’s three state-run airlines to improve services and reduce costs, although analysts have raised questions about the efficacy of the move.
Erick pointed to a similar merger of four state-owned port operators, Pelindo I, II, III and IV, which he said had halved overall costs.
Next, he said, the government would merge the state-owned airlines: national flag carrier Garuda Indonesia, its low-cost subsidiary Citilink and Pelita Air, the airline arm of state-owned oil giant Pertamina.
"SOEs need to keep bringing down costs. Pelindo has been merged from four companies into one [...] We are also pushing for Pelita Air, Citilink and Garuda Indonesia [to do the same] to bring down costs as well," Erick said in a statement on Monday.
In 2021, Garuda Indonesia and Citilink together commanded a third of the domestic passenger aviation market, according to the Indonesia National Air Carriers Association (INACA).
Erick mentioned the plan during a discussion with members of the Indonesian diaspora in Tokyo, organized by state-owned lender BNI.
He added that Indonesia’s state-owned airlines had 550 airplanes, 200 short of the official target. Merging the airlines, he said, could help the country meet the target figure.
