Indonesia Plans Garuda-Pelita Merger to Strengthen National Carrier
Indonesia’s sovereign wealth fund Danantara Indonesia and the State-Owned Enterprise Management Agency (BP BUMN) are planning to merge Pelita Air, a subsidiary of state-owned energy company Pertamina, into the national flag carrier Garuda Indonesia as part of a broader effort to strengthen the country’s aviation sector.
BP BUMN Head and Danantara Chief Operating Officer (COO) Dony Oskaria said Pelita Air will become part of Garuda Indonesia as the government develops the airline into a unified national aviation holding company.
According to Oskaria, the consolidation is aimed at creating a stronger and more competitive national airline capable of responding quickly to the operational and financial demands of the aviation industry. He noted that airline operations require continuous monitoring to ensure each flight remains commercially viable.
As part of the integration process, Danantara Indonesia and BP BUMN have instructed Garuda Indonesia to enhance service quality across the entire passenger journey. Planned improvements include integrated ticketing systems, upgraded airport lounges, enhanced in-flight services and catering, improved cabin crew performance, stronger loyalty programs, and expanded employee development initiatives.
The merger is expected to improve the Garuda Indonesia Group’s competitiveness in the regional aviation market while positioning it as the preferred airline for Indonesian travelers.
The airline consolidation aligns with President Prabowo Subianto’s wider state-owned enterprise reform program, which aims to reduce the number of SOEs from 1,077 entities to fewer than 350 by the end of 2026 through mergers, closures, and restructuring.
During a Cabinet meeting, President Prabowo stated that the government has already saved approximately Rp50 trillion through the consolidation of 250 state-owned enterprises and expects total savings to reach Rp70 trillion to Rp80 trillion once the restructuring program is completed.
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