Garuda Indonesia Must Focus on Domestic Air Travel, Says Erick Thohir
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25 October 2021 07:42 WIB
TEMPO.CO, Jakarta - State-owned Enterprises (SOEs) Minister Erick Thohir on Sunday made it clear that Garuda Indonesia must shift its focus on domestic air travel to improve its business performance. He argues that the flag-carrier had been stuck in unhealthy business after its core business focused on international routes.
Based on Garuda’s records, domestic travelers dominate with 78 percent of its market with a total revenue of up to Rp1,400 trillion while international travelers it served only amounted to 22 percent, generating Rp300 trillion.
“Garuda must focus on the domestic market. I am confident that it will revive again despite taking a long time,” said the Minister on October 24, Antaranews reported.
He added that the SOEs Ministry continues to oversee the business restructure that is currently being done on the flag-carrier but asserts that he will not negotiate with issues regarding misuse of authority and corruption.
Garuda Indonesia is currently facing a mountain of debts stacking up to Rp70 trillion which drove the company to financial losses. The Covid-19 pandemic that hit the nation early in 2020 also did not help the situation.
Erick Thohir mentioned that deals with lessors were found to be too expensive and were being corrupted. He mentioned Pelita Air Service (PAS) as a company that will potentially grow strong and can be developed even further. Unlike Garuda Indonesia, he said, PAS focuses on domestic flights.
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