Garuda plans major restructuring that may halve its fleet

PT Garuda Indonesia needs to completely restructure its business, potentially reducing the number of planes it operates to less than half its main fleet as the airline seeks to survive the crisis wrought by the pandemic, its president told staff last week. “We have to go through a comprehensive restructuring, a total one,” President Director Irfan Setiaputra said in an address to staff on May 19, according to a recording heard by Bloomberg. “We have 142 aircraft and our preliminary calculation on how we see this recovery has been going, we will operate with a number of aircraft no more than 70.” The comments refer to the fleet of Garuda’s full-service airline, excluding its low-cost carrier Citilink. Garuda is already operating at a reduced capacity of just 41 aircraft, and is unable to fly its other planes because it hasn’t made payments to the lessors for months, Setiaputra said. Garuda’s shares slid as much as 7% -- the maximum allowed by the Indonesia Stock Exchange -- Monday morning, and were trading at their lowest since Feb. 1 at 10:03 a.m. local time. The Jakarta Composite Index rose 0.3%. In the remarks, Setiaputra also said that Garuda has around 70t rupiah ($4.9b) of debt which increases by more than 1 trillion rupiah each month as it continues to delay payments to suppliers.<br/>