JAKARTA – Garuda Indonesia has entered a court-supervised restructuring process as the debt-ridden airline tries to rescue itself from bankruptcy.
The new attempt to save the Indonesian flag-carrier began after a Jakarta court granted a debt petition filed against the airline by one of its creditors yesterday.
The ruling gave Garuda and its creditors 45 days to submit a debt restructuring proposal. The period can be extended by up to 270 days.
Garuda said the court’s suspension of debt payment obligations would give it a solid framework to complete negotiations for the debt restructuring process.
The “decision gives us 45 days to submit a composition plan that includes the restructuring of Garuda’s business obligations to creditors”, Garuda president and chief executive Irfan Setiaputra said in a statement.
He added that the airline would ensure all flight operations continue as normal during the process.
Garuda, 60% of which is owned by the state, has suffered massive losses during the Covid-19 pandemic.
It posted a net loss of US$2.4 bil last year, and another net loss of nearly US$1.7 bil from January to September this year.
The airline said in June it had grounded two-thirds of its fleet of 142 jets, due to travel restrictions and declining demand.
In October last year, it announced it would lay off 700 employees – about 10% of its workforce – while many others have been on unpaid leave. – AFP, December 10, 2021
