GARUDA Indonesia has entered a court-supervised restructuring process as the debt-ridden airline tries to rescue itself from bankruptcy. 

The new attempt to save the Indonesian flag-carrier began after a Jakarta court granted a debt petition filed against the airline by one of its creditors yesterday.

The ruling gave Garuda and its creditors 45 days to submit a debt restructuring proposal. The period can be extended by up to 270 days. 

Garuda said the court’s suspension of debt payment obligations would give it a solid framework to complete negotiations for the debt-restructuring process.

The “decision gives us 45 days to submit a composition plan that includes the restructuring of Garuda’s business obligations to creditors”, Garuda president and CEO Irfan Setiaputra said in a statement.

He added that the airline would ensure all flight operations continue as normal during the restructure.

Garuda, 60% owned by the state, has suffered massive losses during the Covid-19 pandemic.

It posted a net loss of US$2.4 billion (RM10.1 billion) last year, and another net loss of nearly US$1.7 billion from January to September this year. 

The airline said in June it had grounded two-thirds of its fleet of 142 jets, due to travel restrictions and declining demand.

In October last year, it announced it would lay off 700 employees, about 10%  of its workforce, while many others have been on unpaid leave. – AFP, December 10, 2021.