(Bloomberg) -- Indonesia is considering switching the chief executive officer at the Garuda Indonesia airline, part of the new government’s push to advance the carrier’s profitability and support its expansion, according to people familiar with the matter.
Wamildan Tsani Panjaitan, the acting chief executive of the low-cost carrier Lion Air, has emerged as the leading candidate for the position, said the people, who asked not to be identified because they’re not authorized to speak publicly. The other potential candidate is Garuda Chief Financial Officer Prasetio, according to one person familiar with the matter.
A new CEO could be appointed as early as the middle of the month, the people said. The job is currently held by Irfan Setiaputra, a former telecom executive who was appointed to the post in 2020 after his predecessor was fired for allegedly smuggling a classic Harley-Davidson motorcycle on a flight to Jakarta.
Representative of Lion Air, which is formally known as PT Lion Mentari Airlines, declined to comment. An official at Garuda said the appointment of board members is the “prerogative of the state-owned enterprises ministry” and that the airline had no additional comment.
The Ministry of State-Owned Enterprises said it had no immediate comment.
New Indonesian President Prabowo Subianto has sought to boost the profitability of the national flag carrier. That includes adding more international flights through an expanded fleet, which the government seeks to increase to more 150 aircraft, according to people familiar. The company currently has about 100 aircraft, including planes under its low-cost unit Citilink.
The 74-year-old airline is a major employer and a key mode of transport for the country made up of 17,000 islands over an area spanning the distance from New York to London. Indonesia’s government is the majority shareholder, meaning parliament needs to approve any significant corporate changes.
Despite the almost $10 billion debt restructuring in 2022 that saw its fleet shrink from about 210 aircraft, Garuda is still struggling to generate a profit amid increased competition with privately-held Lion Mentari Airlines.
Garuda reported a net loss of $29.6 million for the three month ended September, its third quarterly deficit, according to data compiled by Bloomberg.
Shares in Garuda are down 19% this year versus a 2.8% rise in the Jakarta Composite Index.
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