The Indonesian government is mulling a plan to merge Garuda Indonesia with other state-run tourism related companies to cut costs.
It would see the integration of nine state-owned tourism companies including Garuda and low cost arm Citilink.
The merger would include Indonesia’s two airport operators Angkasa Pura, I and II, hotels, and the operations of priority tourism destinations Mandalika in Lombok, Labuan Bajo in Flores and the Borobudur temple and tourism complex in Java.
It would set up a holding company to manage the new entity.
A new holding company would be beneficial to restructuring Garuda’s debt pile, as it owes about $76 million to the airport operators.
Garuda had a first half net loss of $723.26 million.
Talks on a merger have been ongoing for some time and are backed by the President.
“The headwinds in the travel industry provide a good opportunity to start integrating and transforming the tourism and aviation sectors,” President Joko Widodo recently said.