Troubled Garuda Indonesia is set to drastically reduce its international network in 2022. From the current seventeen destinations, only five will remain, Australian website Executive Traveller reported on December 22. Garuda set to slash international network.
The revised international strategy has been announced earlier this week by Garuda’s President Director Ifran Setiaputra in an investor’s presentation. The airline hasn’t published the presentation nor communicated anything about it on its website.
According to Executive Traveller, Garuda will only uphold international services to Hong Kong, Seoul, Tokyo (where it serves both Narita and Haneda), Sydney, and an undetermined city in China. The current network includes Melbourne, Sydney, and Perth in Australia, Bangkok, Kuala Lumpur, Seoul, Tokyo, Hong Kong, and Singapore in Asia, Amsterdam in Europe, plus Beijing, Shanghai, and Guangzhou in China.
Jeddah and Medinah in Saudi Arabia are also on the current schedule, although flights have been suspended due to travel restrictions. Jeddah is set to resume soon, as it is the gateway for Muslim pilgrims who wish to visit the holy city of Mecca during Umrah and Hadj pilgrimage tours. As a Muslim country, traffic between Indonesia and Jeddah, and Medinah has been strong in recent years. Malaysia Airlines and flynas operated dedicated Umrah services from Jakarta, using their own Airbus A380s or one leased from Hi Fly.
Garuda’s restructuring reflects the same process that Malaysia Airlines has gone through since 2014 when it drastically cut back on its international services and reduced its flight and workforce. Garuda is still working on its final restructuring plan. On December 9, it secured a court order granting the carrier a short-term reprieve from making debt payments. This followed a debt petition filed against the airline by IT company Mitra Buana Koorporindo in October. Since December 9, Garuda has 45 days to negotiate with debtors, so this term will expire on January 23.
Garuda reportedly has debts of $9.8 billion. In a court-led procedure, the airline hopes to reduce this to $3.7 billion. It will have to restructure its lease agreements for its fleet, which currently includes 107 aircraft: twelve ATRs, eighteen Bombardier CRJ1000s, forty Boeing 737-800s, and a single MAX 8, 24 Airbus A330ceo’s and three leased A330-900s, and ten Boeing 777-300ERs.
The carrier is said to want to return the three A330-900s in service and terminate the order for nine -900s and four -800s. Two -900s have already been built and are in Toulouse since early and mid-2022 respectively. Garuda also wants to slash its 777-fleet by half. All triple sevens are leased.