Indonesia to decide whether to shut down or refinance national airline Garuda

Southeast Asia's largest economy is mulling over whether to shut down or refinance its national airline, Garuda Indonesia, amid debates widely seen to represent two camps: those who are sentimental and those who are focused on the bottom line. Garuda struggled to make profits even before the Covid-19 pandemic hit. The state-owned enterprise ministry recently came up with four options - the first three keep the 72-year-old airline aloft and the fourth sees it cease operations. To keep Garuda flying despite a revenue slump and huge maturing debts, the government must either inject cash; announce a debt standstill, followed by a restructuring; or go for a debt revamp while creating an airline that would take over Garuda's routes, according to the first three proposed solutions. Garuda's revenue probably shrank to US$1.67b last year, from US$4.57b in the previous year, according to a research note by Jakarta-based equity brokerage Ciptadana Sekuritas Asia. The airline is yet to release its full 2020 financial results. On Thursday, it missed a repayment on a US$500m Islamic debt. A recent viral recording of Garuda CE Irfan Setiaputra's address to staff, whose content was later confirmed by management, revealed that it planned to cut its fleet by 50%, retrench staff and sell assets.<br/>