National airline Garuda Indonesia has announced that it will take over the operations of its rival airline Sriwijaya Group.
Under the agreement, Garuda Indonesia Group, through its subsidiary, PT Citilink Indonesia, will take the reins of Sriwijaya Air and NAM Air and aims to improve the operational and financial performance of Sriwijaya Air Group, including meeting its financial commitments to Garuda Group. The take over will involve a change in Sriwijaya’s management.
“The cooperation on operation aims to assist Sriwijaya Air Group in improving its operational and financial performances, including assisting Sriwijaya Air in fulfilling their commitments and obligations to some third parties, one of which is Garuda Indonesia Group,” the President Director of PT Garuda Indonesia, Ari Askhara, said.
“We hope Sriwijaya will get healthier.”
“With this operational cooperation, we hope Sriwijaya will get healthier… With healthier operation, they will earn profit and fulfil their obligations,” Garuda spokesman Ikhsan Rosan said. However, he declined to disclose Sriwijaya’s financial obligations to Garuda.
Sriwijaya Group has 54 aircraft on its fleet and was supposed to launch an initial public offering in 2017, but put that plan on hold.
This latest agreement gave Garuda a majority share of the fast-growing Indonesian aviation industry. The airline also closes the gap between country’s top carrier, Lion Air, which suffered two major blows recently when its Boeing Co 737 MAX jet crashed killing all 189 passengers and crew. Another one of its planes hit the electric pole during take off.
Air traffic in Indonesia has experienced steady growth thanks to the booming economy and cheap fares that made flying more affordable to people. Indonesia has recorded 129 million passengers in 2017 and is the world’s 10th-largest aviation market.