JAKARTA - PT Garuda Indonesia offers an early retirement program for its employees until June 19, 2021, in order to save the company's finances which are depressed due to losses and debts.
SOE Minister Erick Thohir said he would keep thousands of Garuda Indonesia employees at the state-owned airline company.
"From the report I got, we still retain 1,300 pilots and cabin crew, as well as 2,300 employees," said SOE Minister Erick Thohir in Jakarta, quoted from Antara, Thursday, June 3.
He explained that the COVID-19 pandemic had hit the aviation industry around the world, and there were even foreign airlines that were worse off than Garuda Indonesia.
According to him, the government currently needs to find a way so that the state-owned company can survive the pressure of a negative financial condition.
Erick Thohir said Garuda Indonesia would focus on the domestic flight business by serving inter-island community trips in the country.
"Indonesia is an archipelagic country, so it is impossible for Indonesians to go to other islands by train, they have two choices, namely ships or flights. Garuda and Citilink will focus on the domestic market, not the international market," said Erick.
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The action taken by the government is an effort to save Garuda Indonesia from financial problems due to debts and losses suffered by the company.
Garuda Indonesia is recorded to have a debt of US$4.9 billion or equivalent to Rp70 trillion. This number is increasing by around Rp1 trillion every month due to continued delays in payments to suppliers.
The company has negative cash flow and minus Rp41 trillion debt. The pile of debt was caused by the company's income which could not cover operational expenses.
Based on revenues in May 2021, Garuda Indonesia only earned around US$56 million and at the same time still had to pay US$56 million for aircraft rental, US$20 million for aircraft maintenance, US$20 million for avtur fuel, and US$20 million in employee salaries.
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