Danantara: Garuda Indonesia Has Many Grounded Aircrafts Not Flying

Danantara injects Rp 23.67 trillion into Garuda Indonesia. The fund is allocated not only to Garuda but also to its subsidiaries. There is still a lot of work to be done by Garuda’s management. Danantara Indonesia revealed that many aircraft owned by PT Garuda Indonesia (Persero) are currently unable to operate. This condition is one of the main reasons Danantara injected Rp 23.67 trillion through the Capital Injection Without Pre-emptive Rights (PMTHMETD) scheme. ‘Garuda currently has a large number of grounded aircraft, unable to fly because they have not undergone the necessary maintenance,’ said Managing Director Danantara Indonesia Febriany Eddy in Jakarta. Febriany explained that grounded aircraft cause the company to incur losses twice. The aircraft do not generate income, but leasing and other fixed costs continue. The funds injected are not only allocated to Garuda Indonesia but also to companies under the Garuda Indonesia Group like Citilink. According to Febriany, Citilink actually has more grounded aircraft than Garuda. The received funds will also be used to finance Citilink’s aircraft maintenance. The Rp 23.67 trillion injection is not the first one Danantara has given to the Garuda Indonesia Group this year. Previously, they provided Rp 6.65 trillion in capital, equivalent to 405 million US dollars, in the form of shareholder loans. The funds will also be used for aircraft maintenance. The funds were disbursed first because the situation was very urgent at that time. ‘If delayed, next year might be too late because the hole would be too big. So, most of the money is actually for that,’ said Febriany. In addition to aircraft maintenance, the funds injected into the Garuda Indonesia Group will also be used by Citilink to pay off avtur debts, as well as for land contributions from PT Garuda Maintenance Facility Aero Asia Tbk (GMFI). These three steps are part of the restructuring package prepared to improve Garuda Indonesia’s finances to become healthy again. Febriany emphasizes that this capital support is just the beginning. In the future, there is still a lot of work that Garuda’s management needs to accomplish. She hopes that the additional capital will help make the financial balance of the Garuda Indonesia Group positive again. If it continues to be negative, she says, the company cannot operate normally.