Danantara Indonesia has announced a major capital injection into national flag carrier operator PT Garuda Indonesia, with an initial shareholder loan of 6.65 trillion rupiah to be channelled through PT Danantara Asset Management. The funding marks a significant step in the airline’s long-term business transformation, maintenance and fleet optimisation strategy.
The state asset fund, which was mandated earlier this year to oversee Indonesia’s state-owned enterprises including Garuda Indonesia, disclosed that the capital support will be allocated for business optimisation, long-term funding, governance-driven assistance, and comprehensive performance restructuring. The total value of the funding package is projected to reach approximately US$1 billion.
The first phase of the initiative will focus on maintenance and ensuring the operational readiness of aircraft belonging to both Garuda Indonesia and its low-cost subsidiary, Citilink. Subsequent stages will concentrate on optimising operational and financial performance in support of long-term business transformation.
“The funding support reflects our mandate for transformation through a professional and measurable approach that prioritises the principles of good governance,” said Danantara Chief Operating Officer Dony Oskaria. He noted that the initiative builds on Garuda Indonesia’s restructuring process undertaken between 2021 and 2024, intended to secure long-term sustainability.
According to Dony, the airline is entering a phase of accelerated improvement aimed at strengthening competitiveness and maximising asset utilisation. The initiative will be implemented under a governance framework aligned with international standards, including oversight by an independent financial controller and technical guidance from a global aviation industry expert. These measures are intended to ensure strict compliance with industry best practices.
He further highlighted that the capital support aligns with broader national objectives to bolster domestic connectivity, drive tourism development, and establish Indonesia as a key aviation hub in the Southeast Asian region.
Garuda Indonesia President Director Wamildan Tsani Panjaitan expressed confidence that the support from Danantara would reinforce the airline’s operational capacity and overall performance. “We believe that the success of performance improvement does not only depend on financial support, but also on the company’s commitment to reorganise overall operational and business strategy,” he said.
Wamildan described the capital injection as a strategic opportunity to expedite performance enhancement and accelerate progress towards profitability. In the first quarter of the current fiscal year, the airline reported a 12.54% year-on-year reduction in net loss to US$75.93 million, despite ongoing costs associated with long-term restructuring.
“With the corporate action from Danantara, we are projecting that 2026 will be a turning point for Garuda Indonesia. We are optimistic about recording positive net income,” Wamildan said at a press conference.
Garuda Indonesia is targeting a fleet size of around 120 aircraft within the next five years, positioning itself for expansion and leadership in both the domestic and regional markets. As of March, the airline operated 98 aircraft.
Deputy Industry Minister Faisol Riza confirmed in March that the carrier was preparing to place an order for up to 100 new aircraft this year from leading manufacturers such as Airbus and Boeing. The announcement, originally made by President Prabowo Subianto at the launch of Danantara, was tempered by acknowledgement of the challenges posed by global supply constraints and surging demand from other international carriers.
-The Jakarta Post
