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Garuda Indonesia aircraft. (Photo: Doc. Garuda Indonesia)

JAKARTA - The financial performance of the airline PT Garuda Indonesia (Persero) Tbk (GIAA) has not improved in 2021. Even reported, Garuda Indonesia is being hit by debts of up to Rp70 trillion. To save its business, Garuda Indonesia will conduct a business restructuring that includes a reduction in the number of aircraft fleets by up to 50 percent.

When it was confirmed about Garuda Indonesia's Rp70 trillion debt, President Director Irfan Setiaputra said he was reluctant to comment. He stressed that management is focusing on early retirement plans. This program will be effective as of June 1, 2021.

Furthermore, Irfan said, the early retirement program that is being initiated by his party is more important. Because, concerning human resources (HR) in the body of the red plate airline.

"No comment first yes. Me and the team want to focus on early retirement. It's very important that every employee decides whether or not to participate. They are brothers of all of us," he told VOI on Monday, May 24.

Previously reported, the financial performance of the airline PT Garuda Indonesia (Persero) Tbk (GIAA) has not improved in 2021. Even reported, Garuda Indonesia is being hit by debts of up to tens of trillions.

Quoted from Bloomberg, Monday, May 24, Garuda Indonesia President Director Irfan Setiaputra said that the red-plate airline is in a tough financial condition. According to him, Garuda Indonesia has a debt of USD4.9 billion or around Rp70 trillion.

The amount of debt increased by more than Rp1 trillion per month in line with the delay in payments made by the company to suppliers.

"Currently GIAA's cash flow is in the red zone and has equity of minus Rp41 trillion," irfan said.

Garuda Indonesia will also conduct a business restructuring that includes a reduction in the number of aircraft fleets by up to 50 percent. These efforts need to be made to address the crisis caused by the COVID-19 pandemic.

One form of restructuring is through the reduction of the operational aircraft fleet.

"We have 142 aircraft and according to preliminary calculations regarding the impact of the current recovery, GIAA is likely to operate with no more than 70 aircraft," he said.

The total aircraft fleet covers all sectors of Garuda Indonesia's business except for Citilink. Irfan stated that Garuda Indonesia currently operates 41 aircraft and cannot fly the remaining fleet because it cannot pay debts to creditors for months.

Garuda Indonesia issues early retirement program

PT Garuda Indonesia (Persero) reportedly offers an early retirement program effective from July 1. This offer is owed in an email received by the employees. President Director of Garuda Irfan Setiaputra said this program was carried out as one of the efforts to restore business performance in the new normal era.

"Management is in the early stages of offering an accelerated retirement program for Garuda Indonesia employees who meet the criteria and requirements for participation in the program," he said in a brief message received by VOI, Friday, May 21.

Furthermore, Irfan said the pandemic situation that is still ongoing until now, requires the company to make adjustments to the supply and demand aspects amid a significant decrease in operating performance due to the decrease in flight traffic.

"We need to say that this accelerated pension plan is offered voluntarily to employees who meet the criteria. This policy is the best offer that we can strive for employees in the midst of the current pandemic situation, which of course always puts forward the common interests of all parties, in this case employees and the Company," he said.

Garuda Indonesia, said Irfan, ensures that all rights of employees who will take the program will be fulfilled in accordance with the prevailing laws and regulations as well as the policy of employment agreements agreed between employees and the Company.

"Through the accelerated pension plan we strive to provide opportunities to employees who want to plan for retirement as best as possible. Especially for those who have other priorities outside of work, as well as other career opportunities outside the company," he said.

Irfan did not deny, the decision to present this early retirement program is a tough step that must be taken by the company. Even so, he said this step must be taken.

"But this option must be taken to survive in the midst of uncertainty in the situation of recovery of the performance of the airline industry that has not shown its bright spot during the COVID-19 pandemic," he explained.