Jakarta. Pertamina’s plan to spin off its airline subsidiary Pelita Air Service and merge it into flag carrier Garuda Indonesia has drawn criticism, with a lawmaker warning the move could undermine Pelita’s solid financial and operational performance.

House of Representatives Commission VI member Abdul Hakim Bafaqih of the National Mandate Party (PAN) rejected the proposal to merge Pelita Air with Garuda. He argued that Pelita is currently performing well, in contrast to Garuda, which remains in the red.

“I firmly oppose the merger of Pelita with Garuda. A few weeks ago, I flew with Pelita and even shared the experience on social media. The feedback was overwhelmingly positive. Pelita is in good shape,” Hakim said. 

Pelita Air posted an 81 percent jump in revenue last year to Rp 3.56 trillion ($216.83 million), up from Rp 1.96 trillion ($119.57 million) in 2023, and swung from a loss to a net profit of Rp 96 billion ($5.9 million). Meanwhile, Garuda Indonesia (GIAA) still booked a net loss of $72.71 million, or about Rp 1.18 trillion, over the same period. 

Hakim suggested that if Pertamina intends to spin off Pelita, it should be placed under state-owned asset manager Danantara Aset Manajemen rather than merged with Garuda. “If it’s merged into Garuda, Pelita will inherit the problems. That’s dangerous,” he said.

He also pointed out that the government and Pertamina still have other options to support Garuda, such as taking over its subsidiary Citilink, which is considered healthier. “If the goal is to rescue Garuda, then just take over Citilink. There are still many schemes available,” Hakim added.

Aviation analyst, Gatot Raharjo, echoed concerns, saying the merger plan offers little benefit for the industry. According to him, each state-owned airline already serves its own market segment. “Garuda still has financial issues from the pandemic. Meanwhile, Pelita has built a strong presence in the domestic market. It’s better to keep Pelita as it is,” Gatot told Investor Daily.

He suggested that if Pelita is spun off, it should be placed in a holding structure with Garuda and Citilink, rather than being merged outright. “Garuda, Citilink, and Pelita each have their own market, full-service, medium, and low-cost carriers. Keeping them separate under one umbrella will strengthen competition and enrich Indonesia’s aviation market,” he said.

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