Impairment, lease termination costs drag Garuda deeper in red

Beleaguered Garuda Indonesia widened its full-year losses on the back of hefty impairment and lease termination costs, and despite a decline in expenses. The carrier, which recently obtained creditor and court approval for a multi-billion dollar restructuring plan, was nearly $4b in the red for the year to 31 December 2021. This compares to the record operating loss of $2.2b for 2020, as the coronavirus pandemic impacted passenger travel sentiment. The airline’s financial results show a significant $1.5b impairment of non-financial assets, as well as a $888m early lease contract termination cost, believed to be linked to fleet optimisation efforts. The carrier had previously disclosed post-restructuring plans to cut more than 80 aircraft from its fleet. Garuda’s full-year revenue fell 10% year on year to $1.34b, led by a fall in passenger travel revenue, but offset by a small uptick in cargo takings. Full-year expenses, meanwhile, fell 21% against 2020 to $2.6b. Garuda widened its net losses for 2021 to $4.2b, compared to 2020’s $2.5b. The airline burnt through a significant amount of cash through the year, ending 2021 with $54m in cash and cash equivalents, compared to $199 million at the start of the year.<br/>