Jakarta. The plan to merge the state-owned airline Pelita Air and the flag carrier Garuda Indonesia is still under review, according to the sovereign wealth fund Danantara, as the agency sought to boost the productivity of these airlines.

Danantara, not long ago, pitched the idea of a Pelita-Garuda merger in a hearing with the country’s lawmakers. The fund currently has all state-run enterprises under its wing, including both airlines. Pelita Air is the commercial airline subsidiary of the state-run energy giant Pertamina. Danantara’s chief executive officer Rosan Roeslani told reporters Tuesday evening that the investment agency was still reviewing the merger.

“We are still evaluating everything,” Rosan said on the sidelines of a housing microloan conference in Jakarta.

Asked if Danantara had set a timeline on when they would like to complete the assessments, Rosan said that the agency would just work on the review for the time being.

Earlier that day, Rosan admitted that the merger was part of Danantara’s strategy to propel efficiency and productivity. He said: “We wish to optimize our existing assets, be it from its flight time to the aircraft parts.”

In a letter addressed to the Indonesia Stock Exchange, Garuda Indonesia’s boss Wamildan Tsani wrote Monday that the consolidation plan remained at an “early stage of exploration” as they were still in talks with the relevant stakeholders. Garuda Indonesia, known by its ticker symbol GIAA, promised to make further announcements should there be any significant developments. Wamildan stated that the company was currently “focusing on improving its performance”, among others, by driving passenger traffic and fleet restoration.

Garuda Indonesia has been in the red. The company recorded a net loss of $69.78 million last year, which they attributed to major aircraft maintenance and normalized revenue structure. GIAA operates the low-cost airline Citilink. Pelita Air, on the other hand, managed to bounce back from a loss to an after-tax profit of $5.9 million in 2024, skyrocketing by a whopping 81 percent. 

The proposed merger drew sharp criticism from lawmaker Abdul Hakim Bafaqih, warning that the well-performing Pelita could “inherit” Garuda’s problems. The politician suggested that it’d be better to have Pelita Air under Danantara, rather than being merged with Garuda. The Transportation Ministry also revealed that the carriers would have to operate on a single air operator’s certificate (ACO) if merged. The ACO allows aircraft operators to use their planes for commercial purposes.

GIAA was in the spotlight amidst US President Donald Trump’s tariff fiasco earlier this year. As part of the deal, Indonesia agreed to buy 50 Boeing jets, a large part of the order being the 777 wide-body airliner. Garuda reported that it already owned seven of the 777s as of December 2024. President Prabowo Subianto also sees nothing wrong with the major aircraft purchase, saying that GIAA needed new planes.

“I don’t see any problem with it. We do need the planes, and they [the US] are willing to sell some. Boeing jets are pretty good, and we are still using Airbus planes. So this is where our interests meet,” Prabowo told the press back in mid-July.

Add as a preferred source on Google +