Garuda posts 1H operating loss; liabilities outstrip assets by $4.66b

Garuda Indonesia slightly narrowed operational losses for the first half of its 2021 financial year, as revenues suffered a sharp decline amid the coronavirus pandemic. The beleaguered flag carrier posted an operating loss of $703m for the first six months of 2021, slightly better than the operating loss of $707m a year earlier, according to its interim financial statement. The carrier reports its results in US dollars. Operating revenue fell 24% to $697m, and net losses widened to $902m from $723m in the first half of 2020. As of 30 June 2021, cash and cash equivalents stood at $78.7m, down from $201m at the end of 2020. The carrier adds that as of 30 June liabilities exceeded assets by $4.66b, and that travel restrictions related to Covid-19 have had a “major inverse impact” on operations and liquidity. Given the financial woes, the carrier has failed to meet payments to banks, major vendors, airport operators, and lessors. It’s inability to pay lessors has resulted in the grounding of some aircraft. Several measures are underway to improve Garuda’s financial position. These include negotiations with creditors about debt, and negotiations with lessors to reduce monthly rentals and maintenance reserve payments. In addition, the airline hopes to reduce headcount and receive additional funding support from the government.<br/>