Jakarta, CNN Indonesia —
airline BUMN, PT Garuda Indonesia (Persero) Tbk is on the brink. The company’s financial condition is bloody in the midst of the covid-19 pandemic which has significantly suppressed the number of passengers.
President Director of Garuda Indonesia, Irfan Setiaputra, said that the company’s debt reached Rp. 70 trillion and increased by Rp. 1 trillion every month. The pile of debt was due to the company’s income not covering operational expenses, aka the stake rather than the stake.
Irfan projects revenues in May 2021 to only be around US$56 million. At the same time, Garuda Indonesia still has to pay US$56 million for aircraft rental. maintenance (maintenance) of US$20 million aircraft, US$20 million of aviation fuel, and US$20 million of employee salaries.
“She is cash already negative. In terms of capital, it’s minus IDR 41 trillion,” said Irfan in an internal recording received CNNIndonesia.com, Monday (24/5).
As a result, companies are forced to offer early retirement programs to their employees. This program is voluntary by registering for workers who are willing to start from 19 May to 19 June 2021. It is hoped that the early retirement program can reduce the company’s operational burden.
The issue of Garuda Indonesia has also attracted the government’s attention. Recently, a document containing four options for rescuing Garuda Indonesia bearing the logo of the Ministry of SOEs was circulated to the public, but there has been no official confirmation from the related parties.
The rescue options include providing loans or equity injections, using the bankruptcy protection law to restructure the company’s debt, establishing a new national airline that will replace Garuda Indonesia, and liquidating Garuda Indonesia.
The effort to save Garuda Indonesia is certainly not an easy matter because the COVID-19 pandemic has worsened the company’s condition. However, a number of observers agree that as flag carrier or the national airline, Garuda Indonesia must be saved.
BUMN observer from the University of Indonesia (UI) Toto Pranoto said that as a flag carrier, Garuda Indonesia is not just a commercial airline company. Moreover, the company performs public service duties by flying remote routes that are not accessible by private airlines because they lack economic value.
“Why is Garuda Indonesia important, because this is an airline that carries a national flag, a BUMN whose assignment is not only for commercial purposes but also for PSO purposes, so it needs to be saved or not, in my opinion as flag carrier, yes it needs to be saved, “he told CNNIndonesia.com, Tuesday (1/6).
If Garuda Indonesia is not saved, he doubts that private airlines will fill the void left by the company. Gradually, this condition certainly has an impact on the economy in these remote areas.
Toto stated that the company’s financial problems are not new. During the reign of President Soeharto, Garuda Indonesia almost went bankrupt due to a pile of foreign debt which was exacerbated by the depreciation of the rupiah exchange rate due to the 1998 economic crisis to reach Rp. 15,000 per US dollar.
However, the President Director of Garuda Indonesia at that time, Robby Djohan, managed to save the company through debt restructuring with foreign debtors. The problem with Garuda Indonesia, he said, was continuing due to factors such as: mismanagement or corporate governance errors, one of which is the case in aircraft procurement.
As is known, the former President Director of Garuda Indonesia, Emirsyah Satar, was involved in bribery and money laundering cases related to the purchase of aircraft from Airbus and aircraft engines from Rolls-Royce during the period 2005-2014.
In 2018, the company with the GIAA stock code again stumbled on financial statement problems so that it had to re-present (restatement) the balance sheet.
Consequences restatement According to this, Garuda Indonesia, which previously scored a net profit of US$ 5 million or around Rp. 699.9 billion, had to write another fact, namely a net loss of US$ 175 million, or around Rp. 2.45 trillion.
After losing money in 2018, Garuda Indonesia managed to make a profit of US $ 6.98 million or Rp. 99.11 billion in 2019. However, once again the company stumbled upon a case that tarnished corporate governance.
Former President Director of Garuda Indonesia Ari Askhara is a suspect in the case of smuggling Harley Davidson motorcycles and Brompton bicycles via a new Airbus A330-900 type aircraft flown from Toulouse, France. The incident led to the dismissal of Ari Askhara.
In addition to the governance issue, Toto said another problem that is rooted in Garuda Indonesia is the inefficient flight route selection strategy. For example, instead of flying fat routes domestically and regionally, Garuda Indonesia instead provides direct flights from Jakarta to London which have low occupancy.
In fact, the problems faced by Garuda Indonesia are still continuing in 2020 until now. In fact, Toto said the problems faced by the company this time were more complicated than in previous years.
The reason is, the current problem is not only about mismanagement but loss of demand (demand) due to the COVID-19 pandemic.
The destruction of the airline business due to the COVID-19 pandemic was not only experienced by Garuda Indonesia. The International Air Transport Association (IATA) noted that the losses of all airlines in the world in 2020 reached more than US$100 billion, where the average revenue fell by 90 percent.
“Conditions are now more difficult because the factor is no longer only from one side, in the past the problem was only mismanagement so that when management is corrected Garuda Indonesia can be good again, now it’s not just mismanagement but also demand messy because of covid-19, this is a two-way pressure,” he said.
