JAKARTA - Pertamina's aviation subsidiary Pelita Air will complete its merger with Garuda Indonesia by the end of March 2026 as Indonesia's state-owned airline industry is undergoing a restructuring. 

Dony Oskaria, Chief Operating Officer at state investment body Danantara, said the consolidation would proceed carefully, separating operational issues from strategic planning. Garuda Indonesia will become the holding company that oversees the merged airline operations.

The merger forms part of a wider consolidation drive targeting Indonesia's sprawling network of state enterprises. 

Danantara, Indonesia’s state-owned sovereign wealth fund, plans to reduce state-owned entities and their subsidiaries from over 1,000 companies to around 300 this year. Oskaria said the consolidation could generate Rp 50 trillion in savings, including Rp 30 trillion from eliminating redundant transactions between parent firms and subsidiaries, and Rp 20 trillion from closing loss-making units.

Pelita Air began in 1963 as Pertamina's internal air service division before becoming a separate company in 1970. For decades, the carrier provided charter services for Indonesia's oil and gas sector. 

In April 2022, Pelita Air launched scheduled passenger operations, initially flying between Jakarta and Bali. The airline expanded internationally in August 2025 with Jakarta-Singapore flights.

Pertamina CEO Simon Aloysius first disclosed the merger plans during a parliamentary hearing in September 2025, saying the energy company wanted to refocus on core operations.

Danantara assured employees no layoffs would result from the consolidation. Workers from merged entities will transfer to surviving companies.