SHARES of the state-owned airline issuer, PT Garuda Indonesia Tbk (GIAA) fell 10% to IDR81 per share or down 9 points in trading this Friday (1/9). Based on trade data, the transaction value of Garuda shares reached IDR25.20 billion with a frequency of 5,783 times and a volume of 305.7 million units.

Currently, its market capitalization value is IDR7.41 trillion. In fact, during the trading period of the last two weeks, GIAA’s shares have continued to grow. Likewise, at the level of Garuda’s subsidiary which operates in the aircraft repair business, PT Garuda Maintenance Facility Aero Asia Tbkk (GMFI), also fell 8.33% to IDR66 per share. Its market capitalization value was eroded to IDR1.86 trillion.

The drop in Garuda shares is inseparable from the planned merger of the three state-owned airlines, Garuda, Citilink and Pelita Air. However, based on the latest news, Garuda will still stand as a separate entity, only Citilink will merge with Pelita Air.

“Garuda remains alone. Citilink and Pelita (merger) because Garuda is already good, we will merge Citilink and Pelita,” said BUMN Minister Erick Thohir, in a hearing with Commission VI of the DPR, last Thursday (8/31).

In his considerations, Erick explained that the merger of state-owned airlines was because Indonesia was still lagging behind in terms of the number of aircraft.

As a comparison, the aircraft industry in America has approximately 7,200 aircraft with a population of 300 million with an average per capita income of US$ 40 thousand. Meanwhile, the population in Indonesia reaches 280 million with a per capita income of US$4,700 and it is estimated that it will exceed US$5,000.

“Assume that Indonesia is 10% of America and the most important note is that Indonesia is an archipelagic country, America is one island. If it were 10%, we would have to have 720 aircraft, today the total number of aircraft in Indonesia is more than 500,” said Erick.

Currently, Pelita Air currently has 12 aircraft and the number will be increased to 20 aircraft. Meanwhile, Garuda Indonesia has 60 aircraft and Citilink has 50 aircraft.

Erick believes that the merger of Pelita Air, an airline owned by PT Pertamina, with Citilink is expected to reduce plane ticket prices in line with the increase in the number of planes. The BUMN Ministry is targeting the addition of 30 units of aircraft by 2026.

BUMN Deputy Kartika Wirjoatmodjo or Tiko said that his party is targeting the planned merger of the state airline companies to be completed this year. “But we’ll see what the bookkeeping is like, it needs a process, if it’s this year, it’s this year,” concluded Kartika, when met by journalists, Thursday (8/31), 2023. [ special]