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Garuda comes to rescue as Sriwijaya struggles to stay afloat
The decision to resume management partnership was made in a process that the State-Owned Enterprises Ministry facilitated, said Juliandra Nurtjahjo, the president director of Citilink Indonesia, the low-cost carrier arm of Garuda Indonesia. It resolved a recent management partnership dispute between the two airline groups.
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A PT Sriwijaya Air aircraft is seen at the Syukuran Aminuddin Amir Airport in Luwuk, Central Sulawesi, in this file photo. (Kompas.com/I Made Asdhiana)
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tate flag carrier Garuda Indonesia Group will support Sriwijaya Air Group, as problems ranging from safety to finances mount, forcing Sriwijaya to stop operations for more than half of its fleets.
The decision to resume management partnership was made in a process that the State-Owned Enterprises Ministry facilitated, said Juliandra Nurtjahjo, the president director of Citilink Indonesia, the low-cost carrier arm of Garuda Indonesia. It resolved a recent management partnership dispute between the two airline groups.
“Hopefully with this good commitment and momentum this could be a turning point for us to be recommitted and for both parties to prioritize safety, airplane airworthiness, customers, and this is part of rescuing the country’s assets to support the state of Sriwijaya [...],” Juliandra told a press briefing on Tuesday.
Sriwijaya, owned by tycoon Chandra Lie, has debts it has yet to pay out with various state firms, including US$118 million with Garuda and $52 million with Garuda’s aircraft maintenance company GMF AeroAsia as of June 2019. Other outstanding debts were booked with energy giant Pertamina, lender BNI and airport operators Angkasa Pura (AP) I and AP II.
Sriwijaya turned around a Rp 1.6 trillion loss it booked in 2018 to a profit in the first quarter of this year after it signed a management partnership agreement (KSM) with Garuda in November.
However, Sriwijaya ran into a dispute with Garuda on Sept. 25, announcing it would remove its logos from all Sriwijaya aircraft on “differences in services standards”.
Afterward, a leaked internal letter dated Sept. 29 showed director for quality, safety and security Toto Soebandoro’s plea for Sriwijaya to stop operations temporarily to solve its operational standard and safety issues, as the Transportation Ministry would recommend, according to the letter.
