Destroyed Garuda Indonesia, Lonely Passengers To Lose IDR 1.4 Trillion Per Month

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

JAKARTA - PT Garuda Indonesia (Persero) Tbk (GIAA) is on the verge of bankruptcy in its business. Not only bearing debts of up to Rp70 trillion, Garuda Indonesia's condition was also worsened by the declining passenger occupancy due to the COVID-19 pandemic. As a result, this state-owned airline suffered a loss of 100 million US dollars or equivalent to Rp. 1.4 trillion per month (assuming Rp. 14,300 per dollar).

Company officials also have to rack their brains in order to maintain financial flows in order to maintain the business. This includes the Ministry of State-Owned Enterprises (BUMN) as a shareholder.

Deputy Minister of State-Owned Enterprises (BUMN) Kartika Wirjoatmodjo said that in a month the operational costs would be US$150 million. While the revenue only reached 50 million US dollars.

"So every month we lose 100 million dollars. It is no longer possible for us to continue in this condition. Indeed, we expect support from members of the council to enter into the heavy restructuring process," he said in a joint hearing with Commission VI of the House of Representatives (DPR). RI at the Parliament Building, Jakarta, Thursday, June 3.

Tiko as he is familiarly called, said that the restructuring process would take at least 270 days with a long and tiring legal process. In addition, he said, the process is also carried out internationally because the creditors are investors or world banks.

"Indeed, there is a risk that if the restructuring process results in the creditors not agreeing to it or eventually many legal claims against Garuda Indonesia could occur, not reaching a quorum and eventually leading to bankruptcy. This is what we are avoiding," he said.

To launch the restructuring, said Tiko, the government is appointing legal consultants and financial consultants in the near future. While waiting for the restructuring process, to maintain financial flows a moratorium or flight delays will also be carried out, especially for less productive routes.

Tiko said that if the restructuring process runs smoothly and diverts operational costs, it can save expenses by more than 50 percent. According to him, this step can also increase the length of the company's breath so that the condition of the aviation industry becomes more conducive.