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Garuda grounds two thirds of its fleet

Jakarta Post - June 10, 2021

Vincent Fabian Thomas, Jakarta – National carrier Garuda Indonesia has grounded two thirds of its fleet, citing leasing issues and maintenance needs.

Garuda wrote in a statement filed with the Indonesia Stock Exchange (IDX) on Wednesday that it was only operating 53 airplanes of the 142 in its fleet.

The company added that of the non-operational planes, 39 were under maintenance. It did not specify the status of the 50 remaining aircraft, most of which are Boeing 737-800s and Bombardier CRJ1000s.

"The pandemic reduced the number of aircraft in operation such that only 53 aircraft are in operation for the company's business operations at the moment," the management wrote.

The publicly listed company has been facing deep financial problems because of record low domestic and international air travel demand.

The carrier, which leases 95 percent of its fleet, is seeking to return many of its leased planes to cut back on operational expenses.

"The company is still negotiating with lessors over the grounded aircraft, either to resume their operation or return them," the statement read.

Garuda has not submitted its full-year 2020 financial report, but its third-quarter financial report shows $1.07 billion in net losses in the first nine months of 2020.

The State-Owned Enterprises (SOEs) Ministry estimates that the carrier has over $4.5 billion of debt and loses more than $100 million monthly.

The airline is seeking to save on employment costs by cutting wages, delaying salary payments, speeding up early retirement programs and terminating contract workers.

"The company estimates over $23 million in unpaid wages as of Dec. 31, 2020," read the statement.

Source: https://www.thejakartapost.com/news/2021/06/09/garuda-grounds-two-thirds-of-its-fleet.htm