Garuda Indonesia to Axe 97 Routes

A senior government official says the state-owned airline is now “technically bankrupt,” and must focus on the domestic market.

Photo: Fasyah Halim/Unsplash

Indonesia’s flag carrier will fly 140 routes across its international and domestic networks next year, a sharp reduction from the 237 it operated in 2019. Long-haul flights from Jakarta to Amsterdam, London, and Seoul are among those being terminated due to low pre-pandemic passenger numbers; Garuda will instead concentrate on more profitable “super-premium” routes in the future.

The plans were announced by Kartika Wirjoatmodjo, a deputy of Indonesia’s minister for state-owned enterprises, at a hearing in the House of Representatives. He cited financial reports from September 2021 showing that Garuda had a negative equity of US$2.8 billion with a monthly loss of US$100–150 million, thus meeting the definition of being “technically bankrupt.” The senior official also said the airline may have to withhold employee salaries as it is unable to repay nearly all of its mounting debts.

Garuda Indonesia’s financial woes began long before the Covid-19 pandemic, thanks to continued mismanagement and corruption under previous company directors. The government hopes to save the 72-year-old national carrier through a major restructuring process, downsizing its fleet from 142 planes to between 50–60 in total, and reducing the number of aircraft types from 13 to seven. Top officials have floated the idea of replacing Garuda with Jakarta-based carrier Pelita Air, but the latter only operates a small fleet for charter flights.

Share this Article