Indonesia's national flag carrier, Garuda Airlines to drastically cut its fleet after suffering huge losses

JAKARTA, Sept 20 (Bernama): Indonesia's national flag carrier, Garuda Airlines, reportedly plans to cut a large number of wide-body aircraft, while retaining dozens of narrow-body aircraft to focus on its low-cost subsidiary Citilinks.

The website cited aviation data analytics company Cirium as saying that Garuda is looking to cut nearly 80 planes from its fleet and renegotiate or cancel orders for more than 90 others, reported Vietnam News Agency (VNA).

According to the source, Garuda is expected to launch a settlement plan in order to carry out the restructuring of the group's aircraft lease agreements as well as other debts.

The information was announced after Garuda lost the lawsuit for the payment of aircraft rental fees against two aircraft leasing companies Helice SAS and Atterrissage SAS at the London Court of International Arbitration (LCIA), in which the court ordered the airline to pay the outstanding rent.

In the first half of 2021, Garuda continued to incur a loss of 12.870 billion Rupiah (US$902 million), up 25 per cent year-on-year due to the prolonged travel restrictions.

In its latest financial report, Garuda said its revenue fell 24 per cent year-on-year to US$696.8 million, of which passenger revenue nearly halved to US$375.3 million.

In order to solve the problem, Garuda has implemented a number of cost-cutting measures, including renegotiating aircraft leases, adjusting flight routes and launching an early retirement programme, thereby helping to reduce operating costs by 15.9 per cent to US$1.3 billion in the first half of this year. - Bernama

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Garuda Indonesia , Aircraft , Fleet , Restructuring , Debt


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