Garuda Indonesia (GA, Jakarta Soekarno-Hatta) has asked Central Jakarta Commercial Court to allow a third extension of its deadline to complete its protracted debt-restructuring process, CEO Irfan Setiaputra revealed at a creditors’ meeting at the court on May 10.
The ongoing verification of claims still needs more time, he explained, so the state-run carrier proposed another 30 days for this and for finalising negotiations with creditors under the court-led “debt payment obligation postponement” (Penundaan Kewajiban Pembayaran Utang - PKPU) process.
“It is indeed not easy, so we would like an additional 30 days. We are quite confident that this will be the last extension we propose to the court,” the chief executive pledged, “because we don’t want to be unfair to those who have agreed with the value of their claim or with our proposals.”
He added: “The complexity Garuda faces is not only past debt but also future obligations, especially to lessors and other entities and vendors.” The court will decide on whether to grant more time on May 20, he said. Creditors present at the meeting agreed with the idea of a further extension, according to local media.
The court last granted an extension, by 60 days, in March, until May 20. It had previously prolonged it, also by 60 days, in January.
Garuda Indonesia is trying to slash USD9.8 billion in debts to USD3.7 billion under the PKPU, the airline outlined in December, but it emerged in early January that creditors, lessors, and vendors had submitted USD13.8 billion worth of claims it now needs to verify.
A source told Reuters that Garuda Indonesia and Airbus had agreed on the nominal amount of the manufacturer’s claims that will be included in the debt restructuring - about IDR7.8 trillion rupiah (USD537 million) - and that Airbus had agreed to cancel some of the airline’s orders and “relax” delivery schedules to begin in 2026. According to the ch-aviation fleets module, Garuda has outstanding orders for four A330-800s and nine A330-900s.
Approached for comment by ch-aviation, Airbus responded: “We can’t comment on a restructuring process at our customer which is ongoing.”
“We are grateful for the support and understanding of creditors throughout the PKPU process, which has gone smoothly so far. This is an important sign that the ongoing communication process has shown optimism for Garuda’s business outlook,” Setiaputra told creditors, adding that the carrier remains committed to ensuring that passenger and cargo flights continue to run normally.
According to him, the company’s operational performance in the first quarter of 2022 began to show signs of improvement with the relaxation of pandemic-related travel restrictions. The operation of Umrah and Hajj services from a number of major cities in Indonesia this year “will be a positive signal in our efforts to accelerate the recovery, which we will continue to optimise.”
