New Scheme For The Merger Of SOE Airlines, Erick Thohir: Garuda Remain Premium Then Citilink-Pelita Air Dimerger

Illustration of Garuda Indonesia (Photo: Doc Antara)

New Scheme For The Merger Of SOE Airlines, Erick Thohir: Garuda Remain Premium Then Citilink-Pelita Air Dimerger

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir ensured that only Citilink Indonesia and Pelita Air Service would be merged by the Ministry of SOEs. Meanwhile, said Erick, Garuda Indonesia airlines will still be premium class airlines.

"Garuda will remain in premium and then Citilink with Pelita merger," he told the media after a Working Meeting with Commission VI of the Indonesian House of Representatives, Thursday, August 31.

Later Pelita Air will serve the premium economy and Citilink will serve the Low Cost Carrier (LCC).

Regarding the settlement of the merger, Erick said that the merger of these two entities would be carried out depending on the books of each company.

"This year, yes this year. If not early next year," continued Erick.

Erick assessed that the merger could make the aviation industry stronger and more efficient. He revealed that the domestic aviation industry still needs to be strengthened, one of which is related to the fleet.

Erick Thohir said the number of fleets in the country was still lacking. Indonesia is still short of 200 aircraft, according to Erick Thohir. The lack of fleets is calculated from the comparison between the United States (US) and Indonesia.

In the US country, there are 7,200 aircraft operating for domestic routes. The population there reaches 300 million population with an average GDP (per capita income) of up to 40 thousand US dollars.

Meanwhile, in the Indonesian population, there are 280 million people with a GDP of 4,700 US dollars. According to Erick, more than 100 aircraft fleets are still needed for flights in the country.

"The total number of aircraft in America is 7,200, consider us 10 percent 720. Today 550 means combining Pelita and Citilink plus Garuda only 140," explained Erick Thohir.

Regarding the influence of the Pelita Air and Citilink merger on ticket prices, Erick believes that this process will not immediately lower the price of aircraft.

"It can't be fast. If the plane increases, the competition opens, tickets decrease. Today it happened that we could only control 35 percent of the private sector," concluded Erick.