Indonesian minister clarifies carrier consolidation plans

Garuda Indonesia will remain a stand-alone entity under the latest aviation merger plans under consideration in Jakarta. Late last week, Minister of State-Owned Enterprises Erick Thohir told journalists that he intended to leave Garuda Indonesia alone and instead merge its low-cost subsidiary Citilink with Pelita Air. "Garuda is still alone. Citilink and Pelita (merged) because Garuda is already good, we are merging Citilink and Pelita," said the minister on August 31. Recently, ch-aviation reported that Thohir was examining a consolidation of the three carriers, with an eye on improving their operational and financial efficiencies. According to Jakarta-based media, Thohir wants each of the three airlines to stick to their target markets, with Garuda Indonesia focusing on premium passengers, Pelita Air targeting mid-market travellers, and Citilink chasing the low-cost market. "The three of them will be complementary, not cannibalizing each other," said Thohir. The minister said the plan, which remains subject to a review of each airline's financials, would see the state-owned owner of Pelita Air, oil and natural gas company PT Pertamina, take a stake in Citilink. However, he did not say how big any stake would be. Majority state-owned Garuda Indonesia currently owns 100% of Citilink, and the low-cost airline is widely considered the strongest performer in the Garuda Indonesia Group. Reflecting the importance of Citilink to Garuda's fortunes, shares in Garuda Indonesia fell over 6% in the wake of Thohir's comments.<br/>