JAKARTA – Garuda Indonesia is joining THAI Airways in a period of intensive care.
THAI this week took steps to restructure its operations by entering bankruptcy, a move which will would see the carrier granted an automatic stay restricting legal action from creditors.
In Indonesia, Garuda is finalising a US$1 billion financial bailout plan to meet debts that come due in 2020.
Garuda needs to pay debts of USD500 million in June 2020 while the remaining USD500 million will act as bridging finance to serve as working capital over three to six months.
Indonesia’s government has indicated that it will not bail out the national carrier.
Bharat Joshi, of PT Aberdeen Standard Investments Indonesia told Bloomberg, "The government needs to seriously reconsider the competitiveness of Garuda and manage its cost structure post-COVID-19 before considering any capital injection.
“The aviation landscape will continue to evolve, and the glory days of travel won't return anytime soon."