Indonesia’s flag air carrier Garuda Indonesia is reportedly planning for a major restructuring as it strives to survive from the setbacks of the COVID-19 pandemic. The potential airline’s restructuring may cut its fleet by half.
“We have to go through a comprehensive restructuring, a total one,” President Director Irfan Setiaputra said in an address to staff on May 19, 2021, according to a recording heard by Bloomberg. “We have 142 aircraft and our preliminary calculation on how we see this recovery has been going, we will operate with a number of aircraft no more than 70.”
The second-largest airline in Indonesia, Garuda has a fleet of 142 aircraft, which are standing at 9 years old on average. The largest part of the airline’s fleet consists of the Boeing 737 aircraft family: 73 Boeing 737-800s and one Boeing 737 MAX aircraft. Adding to that, Garuda operates 27 Airbus A330s, 18 Bombardier CRJ-1000s, 12 ATR-72s, and 10 Boeing 777-300ER aircraft.
Due to the ongoing crisis, the airline is already operating only half of its fleet, 58 aircraft, planespotters.net data shows.
In March 2021, Airbus order backlog report revealed that Garuda Indonesia has ordered four Airbus A330-800 aircraft, the less popular variant of the A330neo aircraft family. In addition to four Airbus A330-800 aircraft, Garuda Indonesia has already an order of 14 Airbus A330-900 widebodies, three of which were already delivered.
The cash-strapped Indonesian air carrier is operating at reduced capacity due to pending payments for its aircraft lessors, according to Setiaputra. The airline continues to suffer losses every month due to the COVID-19. The latest airline’s financial reports state that the Indonesian carrier suffered a net loss of $368.4 million in the third quarter of 2020.
“Compliance with COVID-19 measures and the corresponding decreases in passenger and demand for air travel have resulted in a significant reduction in number of flights, which in turn has adversely impacted the company’s operations, revenues, cash flow and profitability,” read Garuda’s statement.
The ongoing COVID-19 pandemic forced many airlines, including Thai Airways, LATAM Airlines, HNA Group to take similar restructuring or bankruptcy protection measures in order to survive the crisis.