BALANCING PROFIT AND PUBLIC SERVICE
As a majority state-owned enterprise, Garuda Indonesia faces a strategic dilemma: operate as a commercially driven airline or fulfil its role in maintaining national connectivity across Indonesia’s vast archipelago, said analysts.
Focusing solely on profitable routes could improve financial performance, but would limit access to air transport in less-developed regions, said Gatot.
Conversely, expanding connectivity often means operating routes with lower demand and higher costs, he added.
Danantara’s Dony said signs of improvement have already appeared this year. He noted that Garuda Indonesia’s subsidiary, Citilink, has posted positive results in the first quarter of 2026, an initial indication of Garuda Indonesia Group’s recovery.
However, analysts noted that addressing the crisis will require coordinated government intervention, not just internal restructuring by the airline.
Since Garuda Indonesia is mainly under the sovereign wealth fund Danantara, the latter could help with certain measures, such as reducing exposure to foreign currency fluctuations or improving fuel pricing policies, said Chappy.
Meanwhile, Gatot posited that Garuda Indonesia could also increase collaboration between central and regional governments to support less profitable routes.
Without such reforms, Gatot warned, the financial strain on the airline could eventually impact connectivity, particularly in remote areas where air travel is essential.
Meanwhile, Faik said that Garuda Indonesia could increase its revenue by developing cargo businesses and strategic partnerships to open new revenue streams.
It should also focus on developing customer experience and services by improving its flight schedule and on-time performance, as well as strengthening its loyalty programme.
Ultimately, experts said Garuda Indonesia’s losses should be seen as a warning sign of deeper structural challenges within Indonesia’s aviation system – challenges that will require long-term policy solutions rather than short-term fixes.
This is a serious matter, given that Indonesia is a vast archipelago and many parts of the country are only connected by air, analysts warned.
“This is the unique challenge of Indonesia as an archipelagic nation,” said Gatot.
“Aviation is not just business, it is a necessity.”