Indonesia's sovereign wealth funds Danantara loans US$405 million to flag carrier Garuda
[JAKARTA] Indonesian sovereign wealth fund Danantara will extend a US$405 million loan to Garuda Indonesia to help the distressed flag carrier turn around finances and expand its fleet in the coming years.
Garuda chief executive officer Wamildan Tsani Panjaitan said in a briefing on Tuesday (Jun 24) that the shareholder loan would be the first step in a 'comprehensive transformation' of the airline that will include long-term financing based on performance. The move confirms an earlier Bloomberg News report of funding plans.
He added that the airline group plans to grow its fleet to 120 aircraft over the next five years. Garuda and its low-cost unit Citilink operated 98 aircraft as of March, down from 103 a year earlier.
Garuda will receive about US$111 million of the funding, with the remainder going to Citilink for maintenance of about 15 grounded jets, Prasetio, the carrier's director of finance and risk management, said.
Danantara chief operating officer Dony Oskaria, speaking at the same briefing, added that global expertise would be brought in to aid Garuda's business plans.
State-controlled Garuda booked a net loss in 2024 after two years of profit following a post-pandemic travel boom. In November, the airline appointed Panjaitan as its new leader tasked with fixing its finances and expanding its global network.
The Indonesian government transfered its 65 per cent stake in the airline to Danantara earlier this year as part of President Prabowo Subianto's overhaul of the management of state-owned enterprises. BLOOMBERG
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