Erick Thohir Calls Garuda Starting To Be Unhealthy When Working On Overseas Flight Routes: Even Though The Domestic Market Money Circulation Reaches IDR 1.400 Trillion

Minister of SOEs, Erick Thohir. (Photo: Doc. Ministry of SOEs)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir wants Garuda Indonesia to refocus on working on the domestic market. Including its subsidiary, Citilink.

According to him, Garuda should follow the example of US airlines, which only focus on domestic logging because it will make revenue much healthier.

"So if Garuda or Citilink only focus on the domestic market, their revenue and bottom line will be much healthier," he said at the Kick Andy Show, quoted on Tuesday, November 16.

Erick gave an example of the many United States (US) airlines, only a few are working on international routes or logging overseas. According to Erick, Garuda also has a large domestic market, such as US aircraft.

"Garuda has a large domestic market such as American planes such as United, Continental, Shortest. How many American planes go abroad, if I'm not mistaken, only United from New York go abroad. Everything else is domestic, Shortest," he explained.

Furthermore, Erick said that this step was taken because he did not want the market or the large domestic market owned by Indonesia to be sold cheaply.

"That Garuda Citilink's business model must return to the local market. As we argued earlier, we have a market, don't sell it cheap. Don't let people just enter," he said.

For your information, this is not the first time Erick has emphasized that Garuda must focus on working on the domestic market. On several occasions, Erick has said it.

Previously, Erick Thohir had emphasized that Garuda Indonesia should focus on working on the domestic aviation market to improve business performance.

Erick Thohir said Garuda Indonesia had been trapped in an unhealthy business when it started working on overseas flight routes.

Based on data from Garuda Indonesia, it is known that domestic passengers dominate as much as 78 percent with revenues reaching IDR 1.400 trillion. Meanwhile, the number of passengers destined for overseas was only 22 percent with the acquisition of IDR 300 trillion.

"Garuda must focus on domestic, I'm sure it will return to health, but it will take a while," said Erick Thohir, Sunday, October 24.

Therefore, the Ministry of SOEs continues to oversee the ongoing restructuring process at PT Garuda Indonesia (Persero) Tbk. However, in the restructuring process, Erick admitted that he was reluctant to negotiate regarding the abuse of authority and corruption.

Garuda was trapped in a mountain of debt of up to 9.8 billion US dollars or equivalent to IDR 139 trillion so that the company suffered losses. The COVID-19 pandemic has also battered Garuda Indonesia's financial performance.