Indonesia’s flag carrier, Garuda Indonesia, widened its net loss during the first nine months of 2021, citing liquidity pressures and “uncertainties about the Group’s ability to continue as a going concern”.
For the first nine months ended September 30, 2021, Garuda Indonesia reported a net loss of $1.7 billion, a notable increase compared to a net loss of $1.1 billion in 2020. The airline’s operating loss plunged to $1.3 billion against $1 billion in 2020.
The negative financial outcome was attributed to the ongoing pandemic followed by stringent travel restrictions, which “has caused a significant reduction in air travel and has a major adverse impact on the Group’s operations and liquidity”.
“All of the above conditions indicate the existence of material uncertainties which may cast significant doubt about the Group’s ability to continue as a going concern,” read the airline’s statement.
During the first nine months of 2021, Garuda Indonesia was not able to meet financial obligations to the banks, vendors, and aircraft lessors, which resulted in the grounding of certain leased aircraft.
Currently, Garuda Indonesia has a total of 111 aircraft in its fleet, according to Planespotters.net. The airline comprises 44 Boeing 737s, 27 Airbus A330s, 18 Bombardier CRJ-1000s, 12 ATR 42/72s, and ten Boeing 777 aircraft. Out of 111 aircraft in its fleet, only 35 are in service.
However, the cash-strapped carrier has implemented measures in order to mitigate liquidity pressure, including negotiating with its creditors and lessors to obtain payment relaxations and positive rationalization of its staff members.