Garuda Indonesia in Merger After $1 Billion Loss

Garuda Indonesia, the flag carrier airline, has reported a US$1.09 billion (£820 million) loss for the first 9 months of 2020.

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Last week the Indonesian Government announced plans to form a new holding company for 9 state-owned companies, including Garuda, to create operational efficiencies and to provide more attractive tourism packages.

The new company would include Garuda, and it’s low cost subsidiary Citilink, together with airport operators Angkasa Pura I (AP1) and Angkasa Pura II, hotel operator Inna Hotels and Resorts, department store Sarinah and will oversee the UNESCO World Heritage Sites.

Inna Hotels and Resorts operation includes 14 properties on Bali, including the 5* Nusa Dua Beach Resort.

There are hopes that the new holding company could be up and running by early 2021 and would aim to share administration, increase collaboration and competitiveness, improve tourism and, importantly, increase funding capacity.

Tourism accounts for 5% of GDP in Indonesia.

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The airline carried eight million passengers up to 30th September, 65.6% down from the same period in 2019. Revenue in the same period was down almost 68% to US$1.13 billion (£850 million). The airlines cargo and charter services contributed almost 40% of revenue in the period compared to less than 5% last year.

Indonesia has reported 444,348 confirmed cases of Covid-19 and 14,761 deaths, the most in Southeast Asia.

Southeast Asia Covid Facts and Figures

Photo credit C on flickr

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