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Govt banking on Danantara to help expand Garuda's fleet
The government plans to use the new sovereign wealth fund to help finance up to 100 aircraft to expand the fleet of the national airline, which has navigated a path of financial turbulence over the past decade or so, alongside a potential aim to strengthen the country's aviation industry.
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An airplane operated by flag carrier Garuda Indonesia lands on Feb. 21, 2024, at Sultan Iskandar Muda International Airport in Blang Bintang, Aceh Besar, Aceh. (AFP/Chaideer Mahyuddin)
D
eputy Industry Minister Faisol Riza has announced that Garuda Indonesia is set to order up to 100 aircraft this year from major manufacturers like Airbus and Boeing, referring to a statement made by President Prabowo Subianto during the launch of the country’s second sovereign wealth fund (SWF).
"The President mentioned this during the launch of Danantara […], and we will order even more in the coming years,” Faisol said on Wednesday, as quoted by Kompas.com.
He admitted that securing aircraft from these top manufacturers would not be easy, however, due to production constraints and global demand from other airlines seeking to increase capacity.
To navigate those challenges, Faisol said the government planned to leverage the new fund’s financial muscle.
“With Danantara’s [strong] financials, we can reassure investors and aircraft manufacturers like Airbus and Boeing to sell their products to Garuda,” he said.
Beyond expanding the flag carrier’s fleet, he also pointed to Danantara’s potential in strengthening the national aviation industry, suggesting that it could help state-owned aerospace company PT Dirgantara Indonesia grow without heavy reliance on foreign investment.
Read also: Danantara may crowd out private investment
