State-Owned Airlines Consolidation: Pelita Air to Merge with Garuda Indonesia

The State-Owned Enterprises Management Agency (BP BUMN) is moving forward with the consolidation of the national aviation industry by merging state-owned airline Pelita Air into Garuda Indonesia. This strategic step aims to strengthen the national aviation sector. Dony Oskaria, Head of BP BUMN and COO of Danantara, confirmed that Garuda Indonesia will become the holding company for state-owned airlines, with Pelita Air integrated into it. He believes this consolidation will enhance the group's capacity to compete in the fierce national and regional aviation market. "The aviation business requires high accuracy and quick, precise operational decision-making, managed day-by-day to minute-by-minute. Route and connectivity analysis are fundamental as profitability can be measured immediately after the aircraft takes off," Oskaria stated. This integration is expected to provide the Garuda Group with more solid financial and operational capabilities. Beyond corporate restructuring, BP BUMN and Danantara are focusing on improving the passenger experience. The integration will encompass three main stages: pre-flight (ticketing system and lounge facilities), in-flight (catering quality, cabin crew service, cabin comfort), and post-flight (customer loyalty programs and human resources development). The goal is to position the Garuda Group as the public's first choice and a key player in the regional market. This merger aligns with President Prabowo Subianto's directive on SOE efficiency. The President previously stated that closing, merging, and consolidating 250 SOEs by July 31, 2026, could save up to Rp50 trillion in the state budget. Key efficiency measures include reducing overhead costs like directors' salaries and office rentals, with a target to reduce the number of SOEs from 1,077 to a maximum of 350 by the end of 2026. This reduction is projected to save Rp70 trillion to Rp80 trillion in state funds. Information Source: VOI English