The ongoing Covid-19 pandemic and the decimation it has caused the global airline industry has seen passenger numbers at Garuda Indonesia fall by 73% in 2020. Now the airline is looking to halve its fleet of 142 aircraft.
Picture Garuda Airlines plane credit c on flickr
garuda relies heavily on domestic flights for much of its income but increasing competition, especially from low cost airlines AirAsia and Lion Air, had already made trading difficult prior to the pandemic.
The airline is now looking at a complete restructuring to make it fit for the future.
“We have to go through a comprehensive restructuring, a total one. Failure to carry out the restructuring program could result in the company being terminated suddenly.”Irfan Setiaputra, President and CEO Garuda Indonesia
Last November Garuda shed 700 jobs as part of efforts to reduce costs and help the airline survive. Shortly afterwards the airline announced a US$1.09 billion (£820 million) loss for the first 9 months of 2020 and the Indonesian government announced plans to merge Garuda and 8 other state owned companies into one more efficient tourism business.
Total debt for the business now stands at US$4.9 billion (£3.46 billion) and is growing at US$70 million (£4.95 million) per month.
There is no information yet as to what routes will be cut from the Garuda schedule once there are just 70 aircraft in the fleet, where priorities will lie or which planes will be cut.
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