Garuda Indonesia Destroys: Loss Of IDR 36.2 Trillion Throughout 2020

JAKARTA - The national airline PT Garuda Indonesia Tbk reported a consolidated loss of US$2.5 billion or equivalent to Rp. 36.2 trillion (exchange rate of Rp. 14,503) throughout 2020.

In its financial report submitted to the Indonesia Stock Exchange (IDX), quoted on Saturday, July 17, Garuda said the group's short-term liabilities exceeded its current assets of US$3.8 billion and the group had an equity deficiency of US$1.9 billion.

"The COVID-19 pandemic, followed by travel restrictions, has led to a significant reduction in air travel, and has had an adverse impact on the group's operations and liquidity," explained the management of the GIAA stock-coded issuer.

Specifically, the company admits that it has not been able to fulfill its financial obligations to banks, significant vendors, such as PT Pertamina for purchasing fuel, PT Angkasa Pura I and II as airport operators, and aircraft lessors.

"The company's inability to fulfill its obligations to the lessor has resulted in the prohibition of the grounding of certain leased aircraft," said Garuda.

With this in mind, the national flag carrier then took several strategic steps, such as negotiating debt with creditors, negotiating with lessors, rationalizing the number of employees, applying for the disbursement of the remaining convertible bonds, and applying for tax breaks.

“If the Group is not able to realize the plans and actions mentioned above, the Group may not be able to continue operating as a going concern. These consolidated financial statements do not reflect the adjustments required if the group is unable to continue as a going concern,” explained the GIAA.

In general, Garuda's performance last year was very depressed. Citing the financial report, the company's operating income in the 2020 financial year was recorded at US$1.4 billion.

This figure is in free fall compared to 2019 when there was no pandemic with 4.5 billion US dollars. Then, operating expenses were recorded at US$3.3 billion at the end of last year.

In the previous VOI report, Garuda Indonesia management had said that of the 142 aircraft currently controlled by the company, 136 of them are leased, while 6 other aircraft are owned by themselves.