Reduce Financial Burden, Garuda Indonesia Returns Two Chartered Planes Early

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

JAKARTA - The national airline PT Garuda Indonesia Tbk. reported that it had returned two aircraft to the lessor. The information was submitted by the company to the Indonesia Stock Exchange (IDX) as a form of information disclosure as a public company.

“Garuda Indonesia is accelerating the early return of fleets whose leases have not yet matured. One of these strategic steps is marked by the return of two B737-800 NG fleets to one of the aircraft lessors," said the President Director of Garuda Indonesia in an official statement as quoted on Friday, June 11.

The State-Owned Enterprise (BUMN) which is engaged in the aviation industry said that the return of the aircraft was in line with the agreement of the two parties involved in this business activity. In addition, Garuda has also carried out the requirements requested by the lessor to complete the changes in the administration of the leased aircraft.

"The acceleration of the return is carried out after a mutual agreement between Garuda Indonesia and the aircraft lessor, in which one of the conditions for returning the aircraft is to change the registration code of the aircraft concerned," he said.

Irfan added that the strategy to return the two chartered aircraft is the company's effort to improve the company's financial performance while maximizing the fleet used today.

"Accelerating the return of fleets whose lease period has not yet matured is part of Garuda Indonesia's strategic steps in optimizing fleet productivity by accelerating the aircraft rental period," he explained.

Furthermore, he said that this is quite important and needs to be done considering the pressure on business performance due to the COVID-19 pandemic where the company's main focus is adjusting to projected market needs in the new normal era.

"Currently, we are also continuing to communicate with other aircraft lessors, of course, by prioritizing the applicable legal and compliance aspects," he said.

As previously reported, the state-owned airline company is in a difficult financial condition following a debt burden of US$4.9 billion or equivalent to Rp.70 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.