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The Indonesian government has announced plans to merge into one holding company, nine state-owned tourism companies including flag carrier Garuda Indonesia (GA, Jakarta Soekarno-Hatta) and its low-cost subsidiary Citilink (QG, Surabaya) in a move aimed at maximising operational efficiencies.

Other state-owned entities to be integrated include airport operators Angkasa Pura I and II; Inna Hotels and Resorts; and the Sarinah department store.

The country’s Enterprises Ministry said in a statement the aim of the integration was to create synergies amongst the state-owned enterprises. With airlines, airports, and tourism companies operating under a single umbrella entity, the objective was to eliminate unnecessary costs; consolidate administrative departments for greater efficiencies; enable collaboration; increase competitiveness; strengthen funding capacity; and improve tourism performance.

The timeline of the establishment of the new holding company was unclear, but news reports said the legal framework could be ironed out by early 2021.

The size of the holding company would make it easier to secure financing from banks and facilitate the flow of public funds to Garuda, which suffered...

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