IDR 23.67 Trillion Injection From Danantara To Garuda Potentially Becomes A Moral Hazard

Garuda Indonesia (intermediate)

JAKARTA - Danantara's plan to disburse capital of Rp. 23.67 trillion to PT Garuda Indonesia (Persero) Tbk has drawn attention. This is because this decision is considered to have no strong urgency and has the potential to cause moral hazard in SOEs.

Indonesia's economic observer Strategic and Economics Action Institution, Ronny P. Sasmita, said the decision was questionable considering the country's fiscal condition was strict, while economic pressure was increasingly felt in society.

"I see Danantara's move to inject IDR 23.67 trillion into Garuda needs to be questioned in terms of priority and effectiveness of public policy," he said via text message, Friday, November 14.

According to Ronny, Garuda has repeatedly received state support, but has never shown significant fundamental improvement.

"Garuda is not once 'artificial breath' from the state. But every time it is injected with capital or restructured its debt, it has never been accompanied by serious structural reforms," he said.

In addition, said Ronny, the state-owned airline's business model remains inefficient, the debt burden continues to accumulate, and the company's governance is often a question mark.

"As a result, the state's capital injection actually risks becoming a moral hazard, because it gives a signal that large losses will always be borne by the state via Danantara, aka borne by the public," he said.

According to Ronny, Danantara's decision is not in line with the mandate of its formation. The institution should manage state assets productively, not become a buffer for SOEs that fail to compete.

"If Danantara's goal is to increase the value of state assets, then the investment should be directed at sectors with clear potential "returns" and "multipliers", not entities that continue to need assistance without showing performance improvements at all," he explained.

Therefore, Ronny assessed that this capital injection step shows that there is no strong corporate fiscal discipline or accountability within SOEs. In a tightening global economic situation, the policy is considered counterproductive.

"In today's economic context, where global liquidity is tightening and the government needs to be careful in managing financing, policies like this are actually counterproductive and have the potential to burden the country's future budget," he said.

Ronny admits that Garuda does have symbolic value as a national airline, but it cannot continue to be used as an excuse to ignore the principles of efficiency and accountability.

"If Garuda wants to be saved, then this rescue should be based on comprehensive reform, not just an injection of funds without a clear direction," he said.

Previously reported, PT Garuda Indonesia (Persero) Tbk received an additional capital of IDR 23.67 trillion from PT Danantara Asset Management (Persero) or DAM. The decision was approved at the Garuda Indonesia Extraordinary General Meeting of Shareholders (EGMS).

The EGMS was held at the Auditorium of the Garuda Indonesia Management Building, Tangerang on Wednesday, November 12, 2025. The meeting was attended by shareholders representing 75.88 percent of the total shares or around 69.42 billion shares.

The additional capital consists of cash payments of IDR 17.02 trillion and debt conversion of shareholders' loans of IDR 6.65 trillion through the mechanism for Capital Increase without Pre-emptive Rights (PMTHMETD).

Of the total Rp23.67 trillion, around Rp8.7 trillion or 37 percent will be allocated for Garuda Indonesia's working capital needs, including aircraft maintenance and maintenance. Meanwhile, Rp14.9 trillion or 63 percent will support Citilink's operations.

The details consist of Rp11.2 trillion for working capital and Rp3.7 trillion for payment of fuel purchase obligations to Pertamina for the 2019-2021 period.

The capital participation was carried out through the issuance of 315,610,920,000 Series D shares with an exercise price of Rp75 per share, as approved in the EGMS.