ASIATODAY.ID, JAKARTA – PT Garuda Indonesia (Persero) Tbk (GIAA) has formally requested a $500 million capital injection (approximately IDR 8.15 trillion, based on an exchange rate of IDR 16,300 per USD) from state-owned investment firm Danantara. The funding is part of the national airline’s broader strategy to stabilize its finances amid ongoing liquidity challenges.
Garuda hopes to secure approval for the capital injection by June or July 2025. The funding process is expected to be carried out in two stages, with the initial phase being critical to help restore the airline’s capital structure and support its turnaround plan.
A substantial portion of the funds will be allocated to Garuda’s low-cost subsidiary, Citilink Indonesia, which is struggling with operational constraints. The capital is intended to reactivate more than a dozen aircraft that are currently grounded due to financing issues.
In a related development, sources familiar with the matter revealed that the government is considering transferring control of Citilink to PT Pertamina (Persero), Indonesia’s state-owned oil and gas giant. Discussions remain preliminary, and no final decisions have been made. If realized, this move could reflect a broader strategy to strengthen synergy among state-owned enterprises, particularly in the transportation and logistics sectors.
Garuda Still in Deep Financial Trouble
Despite recording profits in the two years following the COVID-19 travel rebound, Garuda Indonesia fell back into a net loss in 2024. The renewed financial strain was among the key reasons behind the appointment of Wamildan Tsani Panjaitan as CEO in November 2024.
As of December 2024, the airline’s liabilities exceeded its assets by approximately $1.4 billion, placing Garuda in a negative equity position. Analysts have noted that this capital shortfall must be addressed swiftly if the airline hopes to resume normal operations and regain access to external financing. (ATN)
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