Garuda Indonesia Destroyed In Debt Of Rp139 Trillion, Nasdem Faction: Government Difficult To Fully Help, These 3 Rescue Options Can Be Used

Garuda Indonesia aircraft. (Photo: Wikimedia Commons)

JAKARTA - Garuda Indonesia is facing difficult financial conditions. One of the reasons is the mounting debt of up to IDR 139 trillion. The Nasdem faction of the Indonesian House of Representatives also offered three options to save the company from the mounting debt.

Deputy Chairman of Commission VI of the Indonesian House of Representatives, Martin Manurung, explained that the first option offered by his faction was that the government fully tackle Garuda's financial problems. However, he admits this option is a bit difficult to fulfill.

"This is a rather difficult option. Because with a possible value of around IDR 80-IDR 90 trillion in the midst of our fiscal limitations, of course, it is impossible for us to disburse such large funds. Especially if the alleged burden has problems in past problems such as mark ups and so on", he said during a discussion at the Parliament Building, Senayan, Jakarta, Wednesday, December 1.

The second option, said Martin, is to accelerate renegotiations with the lessor. Moreover, ongoing losses reached IDR 1 trillion per month. If renegotiation is not carried out quickly it will make the debt burden even greater.

"This is what we keep asking in meetings with our partners in Commission VI. How long will the renegotiation and so on take? According to the Deputy Minister of BUMN (Kartika) maybe he needs a maximum of 1 year. per month, then in simple mathematics, we will add another IDR 12 trillion of money to be prepared. This means that we have to speed things up if the renegotiation process is still on the table", he said.

According to Martin, if the two options cannot be carried out, then the third option that can be taken is to create a new company that is healthier and does not have past debt burdens. The goal is that Garuda Indonesia can still be in the air.

"If that is not possible, the other option chosen by us is that we save the Garuda Indonesia Airlines, we finish the PT Garuda Indonesia. Then there is a new company using a permanent brand. so that Garuda Indonesia Airlines will continue to fly with a new body, a better company, without the burdens of the past and so on", he said.

According to Martin, Garuda Indonesia has two inherent entities. First, Garuda is a business entity. Second, Garuda is the national flag carrier. He considered this too difficult. This means that it does not make it free to provide solutions related to the resolution of Garuda's problems as a business entity.

"So we separate between rescuing Garuda Indonesia Airlines as a national flag carrier and PT Garuda Indonesia Tbk as a legal entity or business entity. So, I think this is what maybe we should also ask the public for opinions", he explained.

Martin emphasized that the Nasdem Faction did not want the state's money to be drained just because of past problems that made Garuda's finances unhealthy.

"The point is we don't want state money to be spent on useless things and cover up past problems", said Martin.

On the same occasion, former Commissioner of Garuda Indonesia Peter F Gontha revealed that the cause of Garuda's loss that became his concern was the contract between Garuda Indonesia and the lessor which actually harmed the state-owned company.

"Who forced Garuda? It must be suspected that something happened", said Peter.

For your information, currently, Garuda Indonesia bears a debt of IDR 138.5 trillion and assets of only IDR 98.3 trillion. Meanwhile, Garuda Indonesia's equity was also recorded at minus IDR 40.2 trillion with a negative additional equity each month reaching IDR 1.3 trillion to IDR 2 trillion. Of the total debt value, the largest debt is debt to lessors which reached IDR 90.2 trillion.