Jakarta. Pelita Air will become part of a state-owned airline holding company led by Garuda Indonesia, rather than merge with the national flag carrier, Danantara Indonesia Chief Operating Officer Dony Oskaria said on Friday.

The clarification came a day after Danantara met with Pelita Air's management to discuss the planned consolidation of the two state-owned airlines.

Dony said the initiative is aimed at establishing a holding company for Indonesia's state-owned airlines, with Garuda Indonesia serving as the parent company, rather than combining the two carriers into a single entity.

"Garuda will become the holding company for our airlines, and Pelita Air will become part of the Garuda Indonesia Group. Through this consolidation, these companies will be better positioned to compete and expand their market share," Dony said in a statement.

As the majority shareholder of both Garuda Indonesia and Pelita Air, Danantara said it chose the holding structure to build a stronger, more efficient, and more competitive national airline group.

Beyond the corporate restructuring, Danantara plans to improve service standards across the Garuda Indonesia Group by integrating ticketing systems, upgrading airport lounges, enhancing the in-flight experience, improving cabin crew service and catering, strengthening customer loyalty programs, and investing in workforce development.

Dony said the consolidation and service improvements are intended to position the Garuda Indonesia Group as the preferred airline for Indonesian travelers while strengthening its competitiveness in the regional aviation market.