The Indonesian Government has released a proposal to merge three state-owned carriers Garuda Indonesia, Citilink, and Pelita Air to reduce costs and streamline operations. The announcement for the merger was made by Indonesia’s Minister for State-Owned Enterprises (SOEs) Erick Thohir and reported in The Jakarta Post.
If the merger process goes through, Garuda Indonesia would merge with its low-cost subsidiary Citilink and Pelita Air.
"SOEs need to keep bringing down costs. Pelindo has been merged from four companies into one [...] We are also pushing for Pelita Air, Citilink and Garuda Indonesia [to do the same] to bring down costs as well," Erick said in a statement to the news outlet on Monday.
Merging the three airlines would bring significant challenges, not least the legal issues caused by Garuda Airlines restructuring of its debt last year and continuing losses.