Erick Thohir's Deputy Calls Garuda Indonesia Bankrupt, President Director Irfan Setiaputra: We're Still Flying

JAKARTA - Garuda Indonesia experienced negative equity of US$2.8 billion or equivalent to Rp40 trillion. Meanwhile, Garuda Indonesia's total debt reached 9.8 billion US dollars or equivalent to Rp. 139 trillion. This position has technically dragged the company into bankruptcy.

In response to this, the President Director of PT Garuda Indonesia Irfan Setiaputra emphasized that the company he leads is still running even though it is in a state of debt. Garuda plane, still in the sky in Indonesia.

"We're still flying," he said briefly, to VOI, Friday, November 12.

Furthermore, Irfan said, Garuda has just held a thematic flight "President's Flight" which presents the nuances of state flight services on the Jakarta-Denpasar route, GA 410 which is served with a B777-300 ER fleet with registration number PK-GIG which was previously used to fly President Joko Widodo (Jokowi) on his state visit some time ago.

Through these thematic flight services, said Irfan, passengers have the opportunity to experience different flight experiences with the presence of state flight service attributes represented through various types of in-flight meals served according to the menu provided on state flights some time ago. Elevating the culinary tastes of the archipelago, from Manado yellow rice to Javanese fried noodles.

In addition, said Irfan, the flight also presented various thematic memorabilia, one of which was in the form of a special edition boarding pass "President's Flight" to display the thematic uniform titled "Puspa Nusantara" which was worn specifically by the cabin crew on duty.

Irfan said that the presence of the special flight was a form of Garuda Indonesia's efforts to continue to innovate to provide the best flight experience for all service users. Mainly through the various added value flight experiences that we present in all touchpoints of Garuda Indonesia services.

"We hope that this flight service with the nuances of a state flight can provide a different and proud experience for all passengers, in line with the enthusiasm of the community regarding the first state trip carried out by the President of the Republic of Indonesia, Joko Widodo during the new normal period to a number of countries by using state flight services of Garuda Indonesia," he said.

More than that, said Irfan, this program was implemented not only to be able to share different experiences with all passengers, but also as a form of appreciation for the support of all Garuda Indonesia service users in this challenging time.

"This is a great energy and motivation for us to continue to provide the best flight services for the nation and continue to carry the red and white flag in the skies of the archipelago and the world," he said.

Previously, Deputy Minister of BUMN II Kartika Wirjoatmodjo said that the equity balance of PT Garuda Indonesia (Persero) Tbk had surpassed PT Asuransi Jiwasraya (Persero). He said that Garuda had negative equity of US$2.8 billion or equivalent to Rp40 trillion.

For your information, PT Asuransi Jiwasraya (Persero) was recorded to have negative equity reaching Rp38.4 trillion as of December 2020. Meanwhile, Garuda Indonesia as of September 2021 was in a negative position of US$2.8 billion or Rp40 trillion.

Kartika said that the drop in the level of Garuda Indonesia's balance sheet was also caused by the statement of financial accounting standard (PSAK) 73 made by the company in 2020-2021 which caused the impact of the decline in equity to deepen.

According to Kartika, this position has technically dragged the company into bankruptcy.

"In this condition, in terms of banking, it is technically bankrupt, but not legally, this is what we are currently trying to get out of this position," he said, in a meeting with Commission VI of the DPR, Tuesday, November 9.

Furthermore, Kartika said, the assumption of bankruptcy is because in practice some of Garuda Indonesia's obligations have not been paid. In fact, the salaries of employees have been cut since 2020. Meanwhile, the salaries of company officials have been partially withheld.

"So we must understand together that Garuda's situation is actually technically bankrupt. Because of its long-term obligations, none of it has been paid, including global sukuk, including himbara, and so on," he said.

Tiko, his nickname, explained that Garuda's debt position reached 9.8 billion US dollars. According to him, arrears in payments to lessors worth US$6.3 billion are the biggest debt. Because there is a long-term component, and there is a component that doesn't pay off in the short term.

"If it is stated that the debt is recorded at 7 billion US dollars, plus then the debt from the lessor that has not been repaid another 2 billion US dollars, the total is actually 9 billion US dollars," he said.

Meanwhile, the company's assets are only US$ 6.9 billion. Tiko said the financial problems at the national airline were due to a combination of past corruption and declining revenues during the COVID-19 pandemic.

"So I am often asked why Garuda's performance has decreased because of what? Is it because of corruption or the pandemic? Yes, both, not one. So it is affected because both of them make Garuda's current condition not good," he said.