Jakarta. President Joko "Jokowi" Widodo has approved a plan to put seven state-owned enterprises, including the flagship carrier Garuda Indonesia under a new holding entity in an attempt to boost the aviation and tourism industry in the country, a minister said on Friday. 

Under the plan, Subai Udara Penas, a small unscheduled airline will become the new holding company for Garuda Indonesia, state airport operators Angkasa Pura I and Angkasa Pura II, the air navigation company AirNav, park and tourism complex operators Indonesia Tourism Development Corporation (ITDC) and Taman Wisata Candi Borobudur Prambanan Ratu Boko, retailer Sarinah, and holte opertor Hotel Indonesia Group.

"We will establish a holding company. It was discussed with the President, and, thank God, it was approved," State-Owned Enterprises Erick Thohir said on Friday. 

"The holding establishment is none other than to improve the climate of the aviation and tourism industry," Erick said. 

Erick said that he believed the holding would help lead the recovery of Indonesia's aviation and tourism industry that was all but decimated by the Covid-19 pandemic.

Penas would address the uneven distribution of domestic air traffics, which currently were still concentrated in Indonesia's central and western regions, Erick said. 

He said the new holding company would ensure several international would spread evenly across the archipelago, serving certain functions in line with their geographic location and regional characteristics.

"Holding will arrange airports and flight routes to improve connectivity and encourage the growth of the tourism sector with the aim of equitable distribution of economic growth and improving the quality of public services," Erick said. 

The minister aimed to complete a restructuring process to make Penas the new holding company for tourism by next month. 

Apart from Garuda, a publicly-traded company, the government fully owned all the remaining entities, making the restructuring process much simpler, Erick said. 

Penas serves unscheduled flights and currently operates military transport aircraft Antonov An12, twin-turboprop aircraft Beechcraft Super King Air, jet airliner British Aerospace 146 Serie 100, twin-piston aircraft Cessna 402B and a turboprop airliner Fokker-27.

The company provides weather survey, mapping, and aircraft rental services, including an air ambulance. It is based in Halim Perdanakusuma International Airport in East Jakarta.