Garuda Indonesia's Debt Balloons to $2.2B on Coronavirus Pandemic Woes

To rescue Indonesia’s national airline, additional drastic measures include offering early retirement to 400 of the company’s employees for those aged 45 years and above.

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Irfan stressed that the option of early retirement is voluntary.

Moreover, 800 of its part-time employees were offered unpaid leave while Garuda Indonesia’s board of commissioners and directors have taken a hefty pay cut since April.

The company’s undertaking in recent months is expected to help it save $67 million by year-end.

Looming bankruptcy

On July 7, Irfan admitted that the possibility of bankruptcy loomed above Indonesia’s airline industry.

Although the coronavirus pandemic has opened up the possibility for the company to offer lower ticket prices, the measure would only add more burden to Garuda Indonesia.

Irfan believes that there is a possibility for Garuda Indonesia to declare bankruptcy if it lowers ticket prices despite understanding the need for marketing promotions to entice travelers such as cheaper flights.

Nevertheless, Irfan finds that the effort is difficult for Garuda Indonesia to implement given the tough economic climate during the coronavirus pandemic. 

(Writer: Jawahir Gustav Rizal | Editor: Virdita Rizki Ratriani) 

Source: https://www.kompas.com/tren/read/2020/07/15/125412965/sejumlah-masalah-melilit-garuda-utang-rp-319-triliun-dan-400-karyawan