Garuda defers fleet renewal amid pressure on finances

Garuda Indonesia is not planning to buy any new aircraft this year as the COVID-19 crisis has strained the company’s finances, the airline’s top executive has said. Garuda president director Irfan Setiaputra said Thursday that much of the company’s fleet was still grounded because of falling passenger numbers during the ongoing health crisis. “What is the world going to say if we have a new aircraft while there are many aircraft parked on the ground? It doesn’t make any sense,” he said, adding that the airline’s fleet was still relatively new. “However, nobody knows how things are going to develop next year.” Garuda Indonesia Group, which includes low-cost carrier Citilink, own 20 aircraft and is leasing 190 aircraft with an average age of 7.8 years, according to the company’s data. Garuda’s average aircraft utilization rate, which determines fleet productivity, fell to around 4 hours and 19 minutes per day in July, down from 8 hours and 14 minutes a year earlier, according to the company’s monthly operational report. To further slash the company’s expenditure, Irfan said, Garuda was renegotiating aircraft leasing contracts with lessors. “When the pandemic hit, we contacted our lessors and renegotiated our leasing schemes, debt restructuration, leasing cost restructuration and [more],” he said, adding that the renegotiation efforts had shown positive progress. “Some of the lessors have verbally agreed [to the renegotiated terms]. We only need to write the legal papers and we can execute it once our payment arrears are paid.” <br/>