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THE INDONESIAN Ministry of State-Owned Enterprises (BUMN) describes the financial condition of PT Garuda Indonesia Tbk. which is on the verge of being weighed down by a pile of debt and negative equity reaching US$2.5 billion or around Rp35 trillion (exchange rate of Rp14,000 per US$).
According to Deputy Minister of BUMN II Kartiko Wirjoatmodjo explained that in the face of the heavy burden borne by Garuda, his party is still trying to save and negotiate with lessors and creditors through the process of Postponing Debt Payment Obligations (PKPU). On the other hand, he did not deny that there are other efforts being prepared to anticipate if the plan does not produce results.
“Moreover, I am also aware that the state-owned airline’s finances are increasingly under pressure due to the COVID-19 pandemic. Indeed, Garuda’s condition is on the brink. With such a large debt, negative equity of US$2.5 billion and restrictions on movement and the absence of tourist flows into Indonesia, this is the perfect storm for Garuda,” he said.
Kartiko Wirjoatmodjo confirmed the plan that had been prepared by the Ministry of SOEs in preparing PT Pelita Air Service (PAS) as the national scheduled airline to replace PT Garuda Indonesia Tbk.
“It is true [Pelita is prepared to replace Garuda] because if the recovery of air passengers increases, there will be a serious shortage of aircraft in Indonesia. This is because so many aircraft are grounded by lessors,” he said.
Meanwhile, PT Garuda Indonesia Tbk. (GIAA) is focusing on restructuring amid news that its scheduled service will be replaced by Pelita Airlines Service (PAS). President Director of Garuda Indonesia, Irfan Setiaputra, handed over all options and decisions regarding the fate of Garuda in the future, to the majority shareholder, namely the Ministry of State-Owned Enterprises (BUMN). Including the discourse on the opportunity to close Garuda and replace its services with Pelita.
Irfan views the Ministry of SOEs as a party that can see various possibilities through a wider perspective on various options related to measures to restore the company’s performance.
“Our main focus at Garuda Indonesia at this time is to continue to take accelerated steps to restore performance, which is mainly carried out through a comprehensive restructuring program that we are currently completing,” he said.
Irfan explained that these efforts were intensively carried out through various measures to support the fundamental improvement of Garuda Indonesia’s performance. Especially from the base of flight operations.
“We are optimistic that the positive signal for the national aviation industry in the midst of the pandemic situation which is getting under control and the opening of Indonesia’s leading tourism sector will become an important momentum in the performance improvement steps that we are currently optimizing with all relevant stakeholders,” Irfan concluded [sources/photo special]
