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National airline Garuda Indonesia is on the brink of bankruptcy

Jakarta, Oct 25 (EFE) .- The national airline Garuda Indonesia is on the verge of bankruptcy, beset by debts after months of financial difficulties due to the impact of the covid-19 pandemic, local media reported on Monday.

According to the Jakarta Globe newspaper, the government is prepared for all possible contingencies, including the liquidation of the company and its replacement by the state charter company Pelita Air Service, in case rescue plans are not effective.

“If we reach a dead end, we will close Garuda because injecting more state money is impossible given the company’s huge debt burden,” Deputy Minister of Public Enterprises told Antara Kartiko Wirjoatmodjo news agency.

The company tries to restructure the debt by reaching agreements with its creditors, but even if it manages to stabilize its financial situation, the government rules out operating long-haul flights in the future.

According to its latest results for June, the company, which has more than 7,000 employees, has a debt of 4.9 billion dollars, which increases by about 70 million per month due to the delay in the payment of loans.

(c) EFE Agency

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