Indonesian Tourism Minister urges action to save flag carrier Garuda

Tuesday, 01 Nov, 2021 0

Indonesia’s Tourism Minister has called for urgent action to safeguard the immediate future of cash-strapped Garuda Indonesia.

Sandiago Uno said another wholesale restructuring is its only hope of surviving its current financial plight.

“We should collectively back the restructuring plan since Garuda is a national flag carrier. We must do anything to save Garuda,”  he said.

He said restructuring is the most viable option on the table.

Other options have been put forward such as allowing state-owned charter airline Pelita Air take over Garuda’s operations.

Garuda Indonesia Director Irfan Setiaputra said the company is continuing steps to improve its business performance, and has been in talks with key creditors for several months.

It defaulted on a large ‘Sukuk’ Islamic loan earlier this year and has been returning planes to lessors to cut expenditure.

The government is reluctant to bail out the airline again given its huge asset-debt deficit.

The airline has few major assets and nearly all its aircraft fleet are leased.

“If we meet a dead-end, we will close Garuda down because injecting more state money is impossible given the company’s massive debt loads,” Kartiko Wirjoatmodjo, deputy for the state-own enterprises minister said last week.

Kartiko added that even if it survives this latest crisis, it will emerge much smaller and long haul routes will likely be shelved.

Bloomberg reported this week that it needs about $1 billion just to stay afloat and the government is open to relinquishing its majority stake, Wirjoatmodjo says.

“We continue to negotiate and communicate with all creditors to reach the best settlement and debt restructuring that will improve the company’s fundamental performance,” Garuda corporate secretary Mitra Piranti said in a recent filing to the Indonesia Stock Exchange.

Garuda is still regarded as a quality airline but has been hampered by poor leadership for years.

Two former CEOs have been convicted of fraud and corruption in the past couple of years.

 



Related News Stories :   Hawaiian Airlines launching nonstop Cook Islands flights     Thai Airways, SIA ink airline partnership     Air Canada starts direct Bangkok flights     Highlands airport strikes could impact Christmas travel     UK-bound flight diverted over bomb scare     IndiGo adds new codeshare flight connections to UK, Europe  



Learn more about :   Wonderful Indonesia ( N. America )     Wonderful Indonesia ( Asia Pecific )     Wonderful Indonesia ( United Kingdom )  

profileimage

TravelMole Editorial Team

Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.



Most Read

Elliot Ferguson of Destination DC

TravelMole at Casa 2022

Tommy Thompson CEO of St Kitts Tourism

Zsusa Szegner from Hungary

75th Outrigger Hawaii anniversary celebrates the largest collection of resorts and hotels

Outrigger Hotels & Resorts celebrate their expanded Asia Pacific portfolio on its 75th anniversary

VisitAlgarve has exceeded pre-Covid tourism revenues...Exec Dir Hugo Nascimento expects more

Tim Wolfe of Colorado Tourism explains the strategy that will keep international tourists coming

Sri Lanka Jean-Marc Flambert updates Graham McKenzie at WTM22

The Kingdom Cup comes back to Hilton Head Island

Private video

Jens, CEO of Barbados Tourism details the future tourism strategy for the country
TRAINING & COMPETITION

Price Based Country test mode enabled for testing United States (US). You should do tests on private browsing mode. Browse in private with Firefox, Chrome and Safari