Even Though Garuda Is Called Mismanagement, Erick Thohir Will Provide Protection For The National Airline: Guaranteed Not To Harm The Country

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - The Ministry of SOEs will provide protection to the business of PT Garuda Indonesia (Persero) Tbk. However, the protection that will be provided is not in the form of state capital participation (PMN). SOE Minister Erick Thohir ensured that the protection provided would not harm the state.

"We have to be smart about which ones don't need protection, please, which ones need protection but that doesn't mean it is detrimental to the state. That he can sustain a business without being injected by the state," he said at the Kick Andy Show, quoted Tuesday, November 16.

As is known, the Ministry of SOEs is currently trying to restructure and negotiate Garuda Indonesia's debt, which amounts to USD 9.8 billion or approximately IDR139 trillion.

Although he will provide protection to Garuda, Erick emphasized that his party will not be 'blind in love' to the efforts to save the national flight.

"Blind love ultimately endangers decision-making and also endangers Garuda itself. These are positions that are not easy, this is part of the responsibility of the Ministry of SOEs," he said.

According to Erick, excluding Garuda Indonesia's debt restructuring efforts of IDR 139 trillion. There are a number of efficiency measures that will be taken by shareholders to reduce the company's financial burden. Among them are the reduction of international, domestic flight routes, to the return of aircraft to the lessor.

For your information, the Ministry of SOEs has decided to stop a number of international flight routes for Garuda Indonesia. Where international flight routes will be significantly reduced and leave the volume of cargo which is still considered adequate.

Instead, shareholders multiply or refocus international routes to domestic ones that are considered profitable. However, a number of domestic flight routes will also be reduced from 237 routes to 140 routes, meaning that 97 will be closed.

Not only that, Deputy Minister of SOEs II Kartika Wirjoatmodjo said that Garuda Indonesia would terminate employment or lay off employees. This was done as an effort to increase the efficiency of its financial structure and reduce the debts entwined by Garuda.

Furthermore, Tiko, as he is familiarly called, explained that the layoffs would be carried out with an early retirement program scheme to other programs that management will offer to employees later.

"Garuda plans to reduce the number of employees, either through an early retirement program or other programs," he said in Jakarta, quoted Friday, November 12.

Then, the Ministry of SOEs also opened the option of reducing government shares or dilution in Garuda Indonesia. Shareholders also ask for support in the form of blessing from Commission VI of the House of Representatives (DPR) if the option is possible.

Currently, the state's shares reach 60.5 percent, Trans Airways as much as 28.2 percent, the rest is owned by the public at 11.1 percent. Kartika said that, if the dilution option is adopted, the government will no longer be the majority shareholder in the national airline.