Garuda Indonesia roads to be taken back by government if bankruptcy is declared
Garuda Indonesia Indonesia, the national carrier of Indonesia, may be forced to guide to file bankruptcy. The airline is facing mounting debt after suffering financial hardship for months due to Covid-19. In response, the Indonesian government made arrangements for Pelita Air Service to be a subsidiary Indonesia’s Pertamina oil giant to take over Indonesian domestic flight operations if Garuda Indonesia goes bankrupt.
If Garuda Indonesia fails renegotiate leases, or to restructure the debt amounting to nearly $ 5 Billion, the government is ready to transform Pelita Indonesia into a full-service airline that can meet domestic demand. This will happen once travel restrictions have been lifted.
The charter airline had operated scheduled flights for five year between 2002-2007. It is now focusing its business on charter flights.
Garuda Indonesia’s Board Directors
Garuda Indonesia’s board of directors is currently considering options to help the airline deal with its debts, including making deals for creditors. After extended mobility restrictions reducing demand for air travel, the airline lost more than US$900 million in its first half of the year.
Recently, however, the Indonesian government reopened international flights between Bali and Jakarta, signaling that the country is preparing to resume air travel to Indonesia. Regardless of this reopening the airline will be banned from long-haul flight operations in the future, even if it is able stabilize its financial situation.
The reason for this is that the national carrier has a substantial amount of debt. This debt is increasing by about US $ 70million per month because of late loan payment. The carrier would need to cut its fleet in half to keep it afloat.
Garuda Indonesia’s insolvency led to several lawsuits. The airline’s board considers a plan to drastically reduce its fleet, especially wide-bodied aircraft like the Airbus A330. The plan would see the airline remove approximately 80 planes from its fleet, and cancel any pending orders. Garuda Indonesia plans to reduce its workforce and instead work on Citilink, its low-cost subsidiary.
Garuda, the national carrier, stated in a statement that “Going forward Garuda will remain focussed on efforts to restructure and operate its obligations, as well ensure that passenger and cargo flight operations run smoothly.” Get moving.
Pelita applied earlier in the month for an upgrade to her license so that she can offer scheduled flights along with charter flights. According to the company’s latest annual report, Pelita is currently in possession of six turboprops engines.
- Albert likes long flights and overnight stopovers. The airport and the flight parts of a trip are for Albert the highlights of any trip. As an avid avgeek, he is always eager to see what the airlines have to offer and also check out the regional developments that take place at US-based airports. Local. He has flown almost every major carrier in the United States, Asia-Pacific and Europe and hopes to test the new A350s. Albert recently completed undergraduate studies in business accounting at USC Los Angeles. Currently, he is looking for a job as a business analyst at one of the US airlines. While in college, he interned at LAX (Los Angeles Global Airports) and worked behind-the scenes (and on ramp) in public relations, accounting, and other areas. He loves to roam the Hollywood Hills, visit new places in SoCal and take occasional weekend trips on Spirit Airlines.
Albert likes long flights or overnight stopsovers. The airport and the flight parts of any trip are for Albert the highlights. As an avid avgeek, he is always eager to see what the airlines have to offer and also check out the regional developments that take place at US-based airports. Local. He has flown with almost all the major carriers in the United States, Asia-Pacific, and hopes to test the new A350s.
Albert recently finished his undergraduate studies in Business Accounting at USC Los Angeles. Currently, he is looking to fill a position in the business analyst department with one of the US airlines. While in college, he interned at LAX (Los Angeles Global Airports) and worked behind-the scenes in public relations as well as accounting. He loves to roam the Hollywood Hills, visit new places in SoCal and take occasional weekend trips on Spirit Airlines.