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Sriwijaya appoints new commissioners
The joint operation scheme (KSO) between Garuda Indonesia Group, through its subsidiary Citilink Indonesia, and Sriwijaya Air Group has entered a new chapter with both parties agreeing to strengthen their relationship
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span>The joint operation scheme (KSO) between Garuda Indonesia Group, through its subsidiary Citilink Indonesia, and Sriwijaya Air Group has entered a new chapter with both parties agreeing to strengthen their relationship.
Garuda Indonesia president director I Gusti Ngurah Askhara Danadiputra — known as Ari Askhara — was recently appointed the president commissioner of Sriwijaya Air during an extraordinary stakeholders meeting. The vice president commissioner position is held by Chandra Lie, the former Sriwijaya Air president director.
Other Sriwijaya Air board of commissioner members include Garuda Indonesia’s commercial director Pikri Ilham Kurniansyah and Citilink Indonesia president director Juliandra Nurtjahjo. The board of commissioners comprises six members. The appointment of Garuda Indonesia’s directors to the board is pending approval from the state-owned enterprises minister.
During the extraordinary stakeholders meeting, Joseph Adriaan Saul was also appointed as the new Sriwijaya Air president director, replacing Chandra. Joseph previously served as Garuda Indonesia’s general manager for Bali.
Ari said the KSO would improve the ecosystem of the domestic aviation industry.
“The aviation sector in Indonesia is currently facing tough times. Therefore, Garuda Indonesia Group, which is a state owned company, will work together with private company Sriwijaya Air Group to promote development and bring balance to the aviation climate in Indonesia,” he said in a recently issued statement.
Chandra Lie believes that cooperation will be positive and beneficial for Sriwijaya Air as a brand.
“We are optimistic that Sriwijaya Air will be able to improve its quality, be it on the business side or the operational side, through this cooperation with Garuda,” he said recently.
Garuda Indonesia corporate secretary Ikhsan Rosan stressed that the cooperation was not a form of acquisition and would not change Sriwijaya Air’s share ownership. “We want to make sure that it [KSO] is not an acquisition and Sriwijaya will continue to operate under its own air operator certificate (AOC),” he said on Monday.
Previously, as reported by kompas.com, the tagline “Member of Garuda Indonesia Group” will be put on every aircraft bearing the Sriwijaya Air logo. The tagline will also appear on Sriwijaya Air Group’s flight attendants’ uniforms.
The KSO agreement between Sriwijaya Air Group and Citilink Indonesia was first announced on Nov. 14. The operational and financial management of Sriwijaya Air and NAM Air will be handed over to Garuda Indonesia Group under the administration of the cooperation agreement.
Marketing expert and founder of MarkPlus Inc. Hermawan Kartajaya said the KSO between Citilink Indonesia and Sriwijaya Air Group would ensure the country’s aviation industry was healthier.
“If Sriwijaya and Citilink operate alone, it [the competition] will be unbalanced, as there is a very strong airline group,” he said, referring to Lion Air Group, which holds the biggest market share in the domestic aviation industry.
Hermawan also said the aviation industry was not a simple business as all expenses, such as fuel and spare parts, needed to be purchased using the US dollar. Small players with lower market shares would face difficulties competing if there was a dominant player, he added.
“Operational cooperation is a good idea amid the challenges of the aviation industry. The KSO will ensure Sriwijaya and Garuda Indonesia Group have a [better] economy of skill. The aviation industry alone will also be healthier and more balanced, as competition will not be as bad as before as there will be more large players,” he said.
According to the Indonesia National Air Carriers Association (INACA) in 2017, Lion Air Group controlled a 51 percent market share in the aviation sector.
Garuda Indonesia Group — consisting of Garuda Indonesia and Citilink Indonesia — controlled a 33 percent market share in 2017, while Sriwijaya Air Group — comprising of Sriwijaya Air and NAM Air — held a 13 percent market share.
Through their KSO, Garuda Indonesia Group and Sriwijaya Air Group will together form a dominant player in the industry.
