June 26, 2025
JAKARTA – Danantara Indonesia is set to inject Rp 6.65 trillion (US$407.4 million) into PT Garuda Indonesia as part of a wider funding package to support the operator of the national flag carrier.
The capital support, to be paid out through PT Danantara Asset Management, includes business optimization, long-term funding, governance-based comprehensive assistance and performance restructuring, according to a press release issued by the state asset fund on Tuesday.
The state asset fund, which was put in charge of Indonesia’s state-owned enterprises (SOEs) including Garuda Indonesia earlier this year, will provide an initial investment in the form of a shareholder loan worth Rp6.65 trillion to fund Garuda Indonesia’s maintenance, repair and overhaul (MRO) business.
The total funding package from Danantara is projected to reach around $1 billion.
The initiative will be conducted in phases, with the first phase focusing on the maintenance and operational readiness of the fleets of both Garuda Indonesia’s full-service carrier (FSC) and its low-cost carrier (LCC) subsidiary, Citilink.
The next phase is to focus on optimizing operational and financial performance to support long-term business transformation.
“The funding support reflects our mandate for transformation, through a professional and measurable approach that prioritizes the principles of good governance,” said Danantara COO Dony Oskaria, as quoted in the press release.
Dony added that the initiative with Danantara marked the continuation of Garuda Indonesia’s transformation, following its operational and financing restructuring from 2021 to 2024 aimed at ensuring the company’s sustainability.
He explained that, with the strategic support from Danantara, Garuda Indonesia had entered a period of accelerated improvement to strengthen its competitiveness and optimize its equipment.
Donny added that the implementation would be overseen by an international standard governance system involving an independent financial controller to oversee spending and an aviation industry expert to provide technical expertise benchmarked against global industry standards, as well as ensuring the implementation of best practices in Garuda Indonesia’s transformation process.
The initiative was aligned with the national strategy to strengthen domestic connectivity, support tourism growth and establish Indonesia as a regional aviation hub in Southeast Asia, Dony said.
Garuda Indonesia president director Wamildan Tsani Panjaitan expressed optimism that the Danantara backing would help strengthen operational capabilities through business and performance optimization.
“We believe that the success of performance improvement does not only depend on financial support, but also on the company’s commitment to reorganize overall operational and business strategy,” he said.
Wamildan said the capital injection from Danantara provided a crucial opportunity to accelerate the company’s performance and achieve profitability targets in the near term.
In the first quarter of this year, the company reduced its net loss by 12.54 percent year-on-year (yoy) to $75.93 million despite continued costs incurred from the long-term restructuring effort.
“With the corporate action from Danantara, we are projecting that 2026 will be a turning point for Garuda Indonesia. We are optimistic about recording positive net income,” Wamildan said during a press conference on Tuesday, as quoted by Bisnis.
Garuda Indonesia announced its target to operate around 120 aircraft five years from now, as it seeks to expand and become the main player in the regional and national flight industry. As of March, the company operated 98 aircraft.
Deputy Industry Minister Faisol Riza announced in March that Garuda Indonesia was set to order up to 100 aircraft this year from major manufacturers like Airbus and Boeing, referring to a statement made by President Prabowo Subianto during the launch of Danantara.
However, he acknowledged securing aircraft from these manufacturers would not be easy due to production constraints and global demand from other airlines seeking to increase capacity.
