Garuda Indonesia Business Restructure Persists: Minister Erick Thohir

TEMPO.CO, Jakarta - State-owned Enterprises (SOEs) Minister Erick Thohir on Thursday said steps upon saving flag-carrier Garuda Indonesia from bankruptcy persist, one of which is Garuda's shift to focus on domestic flights. 

However, Garuda is set to sign a cooperation with Emirates to preserve international air travelers which is signalled with code sharing amidst a company restructure. The signing was held in Dubai, United Arab Emirates. 

“Restructuration attempts will continue. Negotiations on Garuda’s debts that reach US$7 billion due to high leasing costs that reach 26 percent and also because of corruption are being negotiated with the lessors,” Erick wrote in a statement on November 4. 

The Minister is pinning his hopes on the domestic market as a positive step that Garuda would venture in the future, while also making available alternative options apart from official partnerships. 

Garuda Indonesia is currently facing a steep debt up to Rp70 trillion that continues to grow each month and is renegotiating with 31 lessors as the flag carrier persists to return the aircraft, which include the types that do not align with the company’s characteristics. The company once said it planned to operate 50 percent from its total fleet of 70 aircraft units. 

Read: Garuda Indonesia Needs US$1bn to Pay Debts

FRANCISCA CHRISTY ROSANA