Erick Thohir: Garuda Indonesia Was Mismanaged, And 'Exploded' During COVID-19 Pandemic

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir said that so far Garuda Indonesia has been too pampered because it has a very strong domestic market. This condition was then exploited by elements within Garuda Indonesia, with the idea of opening overseas routes. The trick is to create scenarios for making money on airplane rentals.

Erick Thohir said the person made a scenario if they wanted to fly to a country, they had to use type A or B aircraft. According to Erick, this is what ultimately causes the number of aircraft owned by Garuda Indonesia to vary. This makes the Garuda aircraft charter the most in the world in one airline industry.

Furthermore, Erick said the losses suffered by Garuda Indonesia were caused by a mismanaged business model. He said that this had happened and continued decades ago and exploded during the COVID-19 pandemic.

"In the end, we are also the most expensive aircraft rental in the world, 28 percent of which the world average is 6 percent of operational costs. This is what we have to face with Garuda complexity, it's not just an incident today, it has happened decades ago. happened and this is a scenario of making money from aircraft rentals," he said, at the Kick Andy Show, quoted Monday, November 15.

According to Erick, the Corruption Eradication Commission (KPK) has proven the existence of individuals seeking profit from the rental of Garuda planes. Where, said Erick, those involved have already received the legal consequences.

Meanwhile, said the former Inter Milan boss, for an expensive plane lease and no money back is foolishness in negotiations. Therefore, Erick wants Garuda and its subsidiary, Citilink, to focus on working on the domestic market.

Furthermore, Erick said that Garuda should follow the example of US airlines. According to Erick, US airlines have more domestic routes than international or overseas routes. This is because Indonesia's domestic market is very strong.

"That's why from the start, we said that the Garuda business model, Citilink, must return to the local market. As we argued earlier, we have a market, don't sell it cheaply," he said.