Indonesia’s PT Sriwijaya Air is in talks with a number of investors to boost its operation. THE JAKARTA POST/ANN Hong Menea
Private airline PT Sriwijaya Air is currently in talks with several investors to boost the airline’s operation following the termination of its partnership with national flag carrier PT Garuda Indonesia last year.
Sriwijaya Air’s finance director Andreas Gunawan said the airline hoped there would be strategic investors willing to inject funds to boost the operation, which has significantly declined following the termination of the partnership with Garuda due to a dispute over the use of the latter’s logo.
“The investors are both from Indonesia and abroad,” he said during a media gathering event in Tangerang, Banten on Monday.
The dispute began after Garuda announced in September it would remove its logo from aircraft operated by Sriwijaya Air and its subsidiary, NAM Air. Both airlines, however, were able to resolve the dispute and continued their cooperation after that.
But the agreement did not last long as in November, Sriwijaya’s lawyer and shareholder Yusril Ihza Mahendra said in a statement that the airline had decided to end the partnership with Garuda.
The partnership was initially meant to save the financially struggling Sriwijaya Air. Under the partnership, Sriwijaya Air could benefit from Garuda Indonesia’s extensive network. However, a power struggle between Sriwijaya Air and Garuda Indonesia executives resulted in an unhealthy relationship.
Andreas said the company would finance its operational needs from its own funds.
Sriwijaya Air’s president director Jefferson Jauwena said the airline was conducting an independent audit on the airline’s debts to Garuda Indonesia Group, along with several other state-owned companies such as Bank Negara Indonesia (BNI), energy giant Pertamina and airport operators Angkasa Pura I and AP II.
The audit, he went on to say, was meant to assess the total debt the airline owed to those state-owned companies. The airline’s debt to Garuda Indonesia alone was estimated at $118 million in addition to $52 million to Garuda’s aircraft maintenance company, GMF AeroAsia, as of June 2019.
“We have appointed an independent auditor to audit our obligations to really find out how much we owe to Garuda Indonesia Group, because we think it is less than what Garuda has claimed,” he said, adding that the audit was expected to be completed in the next two months at the latest.
Despite the severed partnership, Jefferson said the airline was still open to working with GMF AeroAsia for maintenance, repair and overhaul (MRO) services, as well as with other MRO service providers in Indonesia.
The airline is also working to get back on its own feet as the company is retrieving its planes from repair to get its operation back to normal.
“We expect to have three Boeing 737-800 planes operating for Sriwijaya Air again by the end of this month,” he said.
He also hoped Sriwijaya Air could be operating 23 aircraft and NAM Air 14 aircraft by March, this year. The increase in the number of aircraft is expected to be able to further boost Srwijaya Air’s share in the domestic aviation market to 8 per cent by the end of this year from the current market share of around 7 per cent.
He explained that the airline initially held a market share of about 10 per cent. “The termination of the partnership with Garuda partly impacted our market share, but we believe we can increase it gradually in the coming future,” said Jefferson.
THE JAKARTA POST/ASIA NEWS NETWORK
