IO – The latest news about the fate of our flag carrier Garuda Indonesia, reportedly facing bankruptcy and fated to be replaced by Pelita Air Service, a subsidiary of Pertamina, is surely regrettable for many of us – if this is what is really happening. There goes another “pride of the nation”.
We all know too well the recurring financial diffculties suffered by Garuda. It has been like a chronic disease that eats away at it slowly. Unfortunately, the latest crisis has been caused by the unprecedented challenge that is the Covid-19 global pandemic, which has battered the aviation industry around in the world.
This is not only an acute problem for a sickly airline like Garuda: even those historically fully-healthy and mighty have had their wings clipped. If we may entertain the assumption: if there were no Covid-19, surely Garuda’s financial diffculties would have been resolved. But, much like seasonal changes, it would only be a matter of time before it fell into another round of fnancial distress. So, what exactly happened?
The explanation is actually very simple: whenever Garuda begins to have financial diffculties, the government will bail it out, replacing its management.
The Company would return to health and operations would revert to normal, huge profits fowing in, along with many awards that make us proud, and an air of prestige (As recently as 2018, Garuda was conferred Skytrax’s 5-star airline award).
We were awe-struck to witness all its achievements. Garuda was inundated with praise for its ability to make millions of US dollars in profts. Until one day, we were dumfounded to once more learn of its mounting debt.
This is a very predictable cycle that we can easily see from the history of
Garuda’s journey in the past three to four decades.
Much like a fever, Garuda only received fever-reducing medicine; the root cause of the disease was never treated. That’s why the symptom (fever) continues to recur. So, the vicious cycle of state capital injection, return
to health, making profts, earning awards then getting sick again continues on and on.
But with the pandemic, giving it another dose of pain reliever obviously no longer works to make the symptoms go away. A surrogate needs to be found to replace Garuda. Enter Pelita Air Service.
Now if the same approach in managing Garuda is transplanted over to Pelita, we can be certain that it will experience more or less the same thing, but maybe with a more sophisticated “variant.”
The patchwork approach (temporary fix) will also lead to Pelita making
handsome profits, getting praise from various parties, various awards are won. But after time that “fever” will resurface.
The conclusion we can make from Garuda’s debacle is that, ironic as it
is, we as a nation are not yet capably of properly managing an airline.
Imagine, Indonesia, as a vast archipelagic nation and geographically-strategic country, has so many fight routes, domestic and international, which are “guaranteed” to make big profts for any airline. Moreover, as home to the largest Muslim population in the world, the umrah and hajj route is a cash cow.
Any airline, whether Garuda, Pelita or what not, if assigned to carry out the mandate of providing air transportation service in Indonesia, will defnitely turn a proft. This should have been a lucrative source of state revenue that would contribute to the welfare of the Indonesian people as a whole. It is, in a way, a “renewable” natural resource.
So, the sticky question is, why can’t Garuda carry out this mandate? Why did it fail to manage this unlimited natural resource? Why did it fly into a financial storm time and again?
And for that matter, how was it that before Garuda, Merpati Nusantara Airlines (MNA), another stateowned airline, faced its demise? Why do other airlines also fail to be successful even when the country has a plentiful number of “fat routes”? Why do emerging new airlines also fail, even experience shameful, fatal accidents? There are so many questions left unanswered.
We must admit that we, at least for the time being, have “failed” in managing this very promising natural resource. We have “failed” to even
properly manage an airline.
If we just take a moment to refect, we could easily fnd the answer to everything that is wrong with not just Garuda, but our national aviation industry as a whole. There are at least two main culprits for this “failure.”
First, we have yet to have enough aviation professionals, especially
in the airline and airport business management. It is worth noting that
commercial aviation is a relatively new feld, which has only come to
existence since 1903.
Aviation is essentially a “new kid in the block.” However, unlike any other industry, it is a dynamic sector which has developed very rapidly.
This fact has actually been realized since the early 1950s, when the government established the Indonesian Aviation Academy (API) to address the complex challenges facing the aviation industry. Pilots, technicians, air traffic controllers were trained, using state funds, to immediately meet surging demand.
Unfortunately, the government at that time had not yet thought about
providing staff and management training and education for professionals who would sit in the management board of airlines and airports.
Experience has shown that in the airline industry, management reshuffe alone will not work even though the people are smart, intelligent and successful in their previous jobs.
Airlines are a completely different animal. In addition to being technical and sensitive to technological advancement, the management should be “organic”, i.e. coming from within the airline itself—those who have been acquainted with the industry and its technology for decades.
Secondly, as with any hi-tech and dynamic sector, basic governance standard and mechanism must be carried out.
There must be relentless discipline, strict supervision and punishment with deterrent effect if there is any violation. In airline management, this becomes even more important because it is a sector that involves huge
cash fows, so there will always be people who can’t wait put their hand
in the cookie jar.
It’s a pity if Garuda has to be buried because of Rp70 trillion debt due to it is not being managed by professional top management, one that is nurtured from the ground up with the right education and training in the aviation business.
We can only hope that Garuda, like the Phoenix, another mythical bird, can rise from the ashes and soar again.