Danantara Unveils Rapid Transformation Plans for Garuda Indonesia and Krakatau Steel

Jakarta: Danantara Indonesia has outlined fresh progress in the transformation of several major state-owned enterprises under Danantara Asset Management, including Garuda Indonesia, Krakatau Steel, and broader SOE portfolio restructuring.

Febriany Eddy, Managing Director of Business-3 at Danantara Asset Management, said Garuda Indonesia’s turnaround is currently centered on the Return to Service (RTS) program, a crucial step to restore grounded aircraft and secure reliable flight operations.

Many of Garuda’s planes remain idle due to delayed maintenance, resulting in lost revenue while fixed costs continue to mount.

“The longer the aircraft are grounded, the bigger the financial gap becomes. That’s why RTS is the first priority so Garuda and Citilink can resume flying as soon as possible,” Febriany said on Tuesday, November 18, 2025.

Garuda’s transformation strategy focuses on four pillars: boosting customer experience, adopting an adaptive business model, enhancing safety and operational reliability, and modernizing technology to improve efficiency.

“Danantara is fully committed to this transformation, but it’s not a free lunch. We will work with Garuda’s management to oversee the entire recovery process,” she emphasized.

Krakatau Steel’s Strategic Role in National Industry

Krakatau Steel also remains a key priority due to its central role in Indonesia’s industrial supply chain. Demand for steel is expected to rise in line with growth in construction, transportation, and manufacturing.

“Steel investments are long-term—10 to 15 years. You invest for the future, not today. But the industry must stay efficient today,” Febriany said.

Danantara is reviewing options for Krakatau Steel’s gradual development, including operational recovery, asset optimization, and potential technology partnerships to maintain the sustainability of Indonesia’s steel sector.

Aviation Integration and SOE Simplification

In aviation, Pelita Air’s integration into the Garuda Group is being prepared to streamline the national aviation ecosystem, align service segmentation, and strengthen fleet management.

At the broader portfolio level, SOE simplification remains a key strategy to sharpen business focus and enhance efficiency. Strategic partnerships are also being pursued not only for capital access but to bring in new technology, markets, and expertise.

“Garuda and Krakatau Steel are central nodes for strengthening connectivity and core industries. Meanwhile, the SOE restructuring aims to make the state business ecosystem more efficient, competitive, and valuable to the public,” Febriany concluded.