Garuda Indonesia threatened to shut down

Garuda Indonesia, the airline which has served as Indonesia’s flag carrier, is currently in a tangled web of debt rising up to 70 trillion rupiah. This overwhelming amount is said to be due to internal factors, namely the costs incurred for aircraft rental, reparations, as well as transportation for flight crews. 

 

According to flight observer Ziva Narendra Arifin, the airline was ‘already bleeding’, sustaining losses since before the COVID-19 pandemic that plummeted the airline industry. External factors that occurred due to the pandemic had only increased the burden by 15-20%.

 

As a matter of fact, records report that Garuda Indonesia had only made profits back in 2015 and 2017. Even then, profits were ‘very thin’. Arifin predicts that it will take roughly 20 years for Garuda Indonesia to recover from its economic losses and return to its normal conditions. 

 

Despite the evidently insurmountable debts, Arya Sinulingga, staff at the Ministry of State-Owned Enterprises, hopes that the airline can still survive, through negotiations with creditors which are currently underway. 

 

There have been talks about Pelita Air being a potential replacement for Indonesia’s flag carrier. On one hand, it seems that Pelita Air would be ready to take on the role if asked, as the airline has been operating since 1963. However, the government, together with the Ministry of SOEs, is maximizing its efforts on primarily saving Garuda Indonesia. 

 

“The option regarding Pelita will come later. The foremost thing that we are currently trying is to fight, and to be able to negotiate with lessors, parties who have debts with Garuda,” explained Arya Sinulingga to reporters.