Garuda Receives Rp7.5 Trillion Disbursement From PMN, Rudi Hartono Questions Fund Allocation

JAKARTA - Garuda Indonesia will receive a State Capital Participation (PMN) of Rp7.5 trillion. The Ministry of State-Owned Enterprises (BUMN) noted that half of Garuda's PMN will be used to repair a number of aircraft, while the other half will be used for the company's operational costs.

Meanwhile, until now the budget has not been disbursed by the Ministry of Finance (Kemenkeu). This PMN budget allocation also received sharp attention from Member of Commission VI DPR RI, Rudi Hartono Bangun.

"After winning the PKPU (Suspended Debt Payment Obligation (PKPU), the people's funds for PMN Rp7.5 trillion will be given to the Garuda Indonesia directors. I represent the people and want to ask, the Rp7.5 trillion money will be allocated and used for any expenses and activities ?” asked Rudi at the Hearing Meeting on Thursday, June 30.

He emphasized that the PMN of Rp7.5 trillion was not a small amount, so he questioned the clarity regarding the allocation of the PMN.

Regarding the plans of Garuda's directors in the future, Rudi also questioned Garuda's plan to add new flight routes, while some of the existing aircraft have been returned to the lessor.

“Which money do you want to use for the addition of a new plane? Did you use the Rp7.5 trillion (PMN) money? And I want to ask, Garuda's operational costs and expenses and ticket sales are at a high price compared to similar airlines such as Lion Air, Batik Air, then the directors calculated, and reported, so far (financially) at a loss. What kind of consultants do you use for Garuda management? How come people are not ashamed to see it, the directors who make policies feel confident and feel (at the very least) right," continued Rudi.

He also suggested that the tickets sold by Garuda Indonesia should be able to match other local airlines.

"The tickets that you (Garuda) sell must match (other airlines), at least Batik Air. And must be profitable. If you call it a loss again, it means that the new directors use the old management, aka mark up expenses. If that still happens, Garuda must be disbanded. All management must be replaced, because it is dirty. It's impossible to sweep the floor clean if the broom is dirty. It's not wrong to pay Rp7.5 trillion for the repair shop, isn't it wrong? Or maybe the Rp7.5 trillion money is to pay the debts of the old directors," explained Rudi.

Meanwhile, Garuda Indonesia Finance Director Prasetyo explained that the plan to increase the fleet will be carried out with two options. The first is a Joint Operation (KSO) with PT Perusahaan Pengelola Asset, or with a private business entity that wants to turn on aircraft that are not in use or under maintenance by way of profit sharing for selective routes.

“Waiting for PMN is a bit long, about 6 months, but other options are inviting synergy with PT PPA. If it is agreed later, we will discuss again," said Prasetyo.

This means, explained Prasetyo, if there is a preferred route for the aircraft that is agreed to for cooperation, the proceeds will be used to pay off the interest and collateral. Meanwhile, the second option is offered by operating cooperation with the private sector.

"We offer it to the private sector who wants to finance it, the return is quite good," he explained while saying, after road operations, there will be a clause for termination when the PMN from the Ministry of Finance is received by Garuda.

Prasetyo explained that Garuda's financial condition was under heavy pressure in the last two years of the pandemic, where passenger traffic experienced a sharp decline.

“Garuda has been under heavy pressure for the last 2 years, from a revenue drop of almost 70 percent. This was followed by a fairly large additional debt that improved last April during Hari Raya, where currently monthly revenue reaches 120 million US dollars. The direct cost is still maintained at around 50 percent, especially the highest cost of avtur," he concluded.