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Tangsel, 29 April 2022

Seven days ago, the House of Representatives (DPR) has approved the gov't scheme to save Garuda, by injecting Rp 7.5 trillion state capital investment (PMN) out of the 2022 budget. Provided Garuda reaches a peaceful agreement with creditors in a request for debt payment postponement (PKPU). Whereby the largest component of the debt is on the aircraft lease.

Among all other pre-determined rescue scheme, namely immediate business plan implementation, streamlining number of aircraft, routes optimization, and boosting cargo revenue. And of course the consistent implementation of good corporate governance.

The house also approved the possibility of privatization, thru debt to equity conversion and capital addition. By maintaining at least 51% of state ownership.

Loss increased to US$ 1.66 bio, Revenue decreased to US$ 939.02 mio, Assets decreased to US$ 9.42 bio, Liabilities increased to US$ 13.02 bio, and Equity down a lot to minus US$ 3.60 bio.

That is the current condition compare to the same period prev year. In another word, even if Garuda sells all the assets, still can't cover the debt.

The price to save the national carrier is very expensive, and the question whether it is worth saving are there from the concerned taxpayers. After all, the pre-existing problem is there long before covid-19 crisis, and that this is not the first time Garuda being saved, with the same issues of alleged mismanagement and corruption. That's one perspective.

Another perspective is that, Garuda as the flag carrier is way too important to fail, as the matter of national pride, and the need to maintain the trust of foreign investors, among other reasons.

My 1st love as a boy was the Garuda B747 aircraft back in the days, the queen that got me into this industry in the first place. So yes, now that we see the light at the end of the tunnel with the industry gradualy recovering, I'm in favor to save Garuda, provided permanent fix applied on the known issues.