Danantara confident aviation leasing development will yield significant benefits

Indonesia’s Investment Management Agency (BPI) Danantara is convinced that the planned formation of an aviation leasing fund company will deliver substantial benefits. Danantara Chief Operating Officer Dony Oskaria explained in Jakarta on Wednesday that the establishment of an aviation leasing company is still undergoing in-depth study. He noted that, in line with Indonesia’s projected aviation growth, owning a leasing company is considered a more effective option. He stressed that no final decision has been made on the creation of the leasing company, and all business aspects are still being evaluated to ensure the chosen scheme provides optimal benefits. “We are exploring the possibility of having our own leasing company. With the future development of Garuda Indonesia, it will be more effective for us to own it. This is being studied, but everything must be done carefully, studied thoroughly. We are examining the best option, and that is what we will do,” Dony stated. Dony added that if the leasing company is established, its operations will function like any standard leasing company. “If it becomes a leasing company, it will certainly operate as a leasing company does, but it is still being studied,” he said. “Leasing is the financing side. So, the aircraft are purchased for Garuda, but the financing is handled by the leasing company,” he elaborated. He assessed that such a financing model could strengthen an airline’s financial condition, particularly for PT Garuda Indonesia (Persero) Tbk, while creating broader benefits for the financial services sector. Previously, PT Danantara Investment Management (DIM), SMBC Aviation Capital, and Mandiri Investment Management announced a partnership agreement to develop the Mandiri Aviation Leasing Fund, Indonesia’s first aviation leasing investment platform with an initial portfolio value of approximately USD 800 million. Danantara Chief Investment Officer Pandu Sjahrir described the partnership as a crucial step in Indonesia’s participation in the global aviation financing ecosystem. SMBC Aviation Capital Chief Commercial Officer Barry Flannery expressed delight at forming this strategic partnership to help advance the aviation ecosystem both in Indonesia and internationally. Mandiri Investment Management Chief Executive Officer Baskoro Adi noted the partnership reflects a commitment to developing innovative investment solutions that connect global investors with high-quality aviation assets.