The pandemic has made many airlines suffer, as experienced by Garuda Indonesia and also Malaysia Airlines. In the midst of debt entanglements and huge losses, the two flag carriers offered restructuring proposals to creditors and lessors.
However, the Associate Partner of the BUMN Research Group at the University of Indonesia (UI) Management Institute, Toto Pranoto, saw that there were fundamental differences in the restructuring of Garuda compared to Malaysia Airlines.
Namely on the role of the government as the owner of each of these airlines. Toto commended the Malaysian Government’s move, which guaranteed the restructuring of their airline.
“Malaysia Airlines also has the same problem, he was sued by many creditors. But the good thing is, he was there and the government said, ‘We will guarantee the restructuring program for Malaysia Airlines until 2025’,” said Toto in a Focus Group Discussion (FGD) themed ‘SOE Liquidation from Legal, Business and Social Aspects’, which took place at the Le Meridien hotel, Wednesday (17/11).
“So that in April this year, their negotiations with all creditors and lessors have been completed,” he continued.
According to him, Garuda Indonesia should be given the opportunity to complete the negotiation and restructuring process with creditors and lessors, to the end. In line with that, lest there be any ‘auras’ that could hinder the renegotiation.
“So if negotiations are currently underway, there should be no news of ‘Oh, later if you can’t, then Pelita Air Service will be the one to bring it up.’ The negotiations haven’t finished yet,” said Toto.
SOE Minister Erick Thohir. Photo: Aditia Noviansyah/kumparan
Minister of SOEs, Erick Thohir, previously also stated that the steps to rescue Garuda Indonesia were quite complicated, so they had to be done carefully. He also highlighted the Garuda corruption case in the past, which had been handled by the Corruption Eradication Commission (KPK).
In addition, Erick Thohir also said that Garuda Indonesia’s business model was wrong from the start. Namely working on overseas flight routes, even though they have a large domestic market. The impact reaches its lowest point during a pandemic.
“Garuda must focus on domestic, I’m sure it will return to health, but it will take a long time,” said Erick Thohir in Palembang, Sunday (24/10).
“Pelita Air can be developed, as long as you don’t follow the styles abroad. Because flights abroad can result in unhealthy operations,” added Erick Thohir.