Bali Discovery Tours: Homepage
Bali Hotels, Bali Villas and Bali News from
Home Bali Contact Bali Practicalities Bali News Bali Services Bali Transportation Bali Sports Bali Excursions Bali Villas Bali Hotels
Home · News · Rescuing Garuda
Bali Hotels, Bali Villas and Bali News from
Bali Hotels
Bali Villas
Special Deals!
MICE Handling
Bali Excursions
Culinary - Dining
Guided Tour
Bali Spas
Bali Sports
Bali Transportation
Car Rental - Selft Drive
Private Jet Charter
Bali News
Bali Services
Bali Practicalities
Bali Contact
Bali Career
Bali Update
Subscribe to our free weekly newsletter!
PATA header
PATA Gold Award 2007
Bali Update
PATA Gold Award Winner 2007
Bali Contact
Bali Discovery Tours
Jln. By Pass Ida Bagus Mantra,
Jln. Pucuk 1 No. 70X
Denpasar, Bali

+62 (0)812 3819724
+62 (0)361 464 032, +62 (0)361 471 0242

Bali Discovery

Bali News

Rescuing Garuda

Editorial: Following US$ 107 Bailout by Government of Indonesia's National Carrier, an Editorial in the Jakarta Post Asks Will this Be Sufficient to Save Garuda?

Bali News:
Click Image to Enlarge


A recent editorial in the Jakarta Post praised the last-minute cash bailout of US$107 million (Rp. 1 trillion) provided by Indonesian legislators for Garuda Indonesia but posed the question if such help provides anything more than short-term superficial relief.

In the words of the Jakarta Post: "Without debt restructuring to reduce its debts to a sustainable level, without new strategic investor to bring in synergy and without significant progress in operational restructuring, Garuda will again suffer a liquidity crisis and could eventually go bankrupt. After all, Garuda is burdened with almost $1.2 billion in debts and an annual debt servicing burden of $110 million."

And, indeed, the government cash injection granted on Thursday, September 14, 2006, is little more than a short term palliative for what ails the Carrier. Considerably less than the US$230 million sought by Garuda to allow continuing operations while it negotiates "another" debt restructuring deal with it European creditors, the US$107 million given by the Government will keep the Airline in the air for now but leave it little room for seeking its second debt restructuring since 2001.

While crediting Garuda with successfully reducing its losses in 2005 to Rp. 675 billion from Rp. 875 billion suffered the previous year - lower demand for international flights to Indonesia dating from the 9-11 terrorist attack of 2001, escalating fuel prices and a highly competitive deregulated domestic airline environment have all taken their toll on the Indonesian carrier's bottom line.

Simply Not Enough

Mounting losses and persistent demands for repayment of debt, according to The Jakarta Post, could make "this latest financial assistance. . . meaningless within a few months if Garuda cannot conclude another debt restructuring deal with its domestic and foreign debtors to reduce its debts to a sustainable level."

The newspaper added: "But a sustainable debit level is not enough. Given the keener competition within the domestic and international markets, Garuda needs significant corporate restructuring and a new strategic investors to strengthen its competitiveness. Garuda requires a new strategic investor to strengthen its capital, improve its efficiency, modernize its jets and make its route network more efficient. We should not be such narrow-minded nationalists as to oppose a minority foreign shareholder in Garuda, despite its role as the national flag carrier. The other alternative is another bailout at the expense of taxpayers."

Urging more financial support The Jakarta Post is positive about Garuda's future saying "despite its current financial distress, (Garuda) has a promising future, providing it can strengthen its efficiency and improve its service to international standards. And, most importantly, it has a vital role to play in servicing the vast archipelago and the Asian region."

© Bali Discovery Tours. Articles may be quoted and reproduced if attributed to


Bali News by Bali Update
Subscribe to the Bali Update
Receive the latest news from Bali by email!

Our [Privacy Statement] explains how we handle the data you are providing.

Bali News by Bali Update
Explore the Archive of the Bali Update
Find related articles in our news archive!

or try to use Google Search :

Home · Bali Hotels · Bali Villas · Bali Excursions · Bali Sports · Bali News · Site Map · RSS

Bali News: More News
Weather Warning for Bali
Meteorologists Warn of Potential for High Winds and High Waves in Bali Until March 25th from Tropical Cyclone Marcus
Airspace Over Bali No Longer Empty
Bali Airport Reopens After 24-Hour Closure for Nyepi New Year Observances
Business is Sky High
Indonesia’s Aviation Industry Booming with More than 100 Million Passengers Flown in 2017
Chinese Returning in Droves to Bali
Badung Regency Official Says Chinese Travelers are Bullish on Bali
New Ubud Gallery Opens with Two-Man Exhibition
Paintings by John van der Sterren and Ketut Gede Susana Exhibiting Through July at NKRI Art at The Ayung Resort, Ubud
Bali before the Balinese
Tenganan Village Fights to Preserve its ‘Pre-Balinese’ Ancient Traditions in a Rapidly Changing World
A Rest Area on a 12-Km Toll Road
Bali Toll Road Seeks to Increase Revenues by Moving Ahead with Plans to Build a Rest Area
Proud List of Past Achievements for the People of Bali
In the Midst of IMF-World Bank Conference Preparations, Bali Governor Pastika Reflects on What his Administration has Achieved on Behalf of the People of Bali
Diplomatic Reassignment
British Consulate-General’s New Address in Bali
When Anneke Goes Coasting
Dutch Woman Undetakes Annual Marathon Swim in North Bali to Protect the Environment
Short Shrift to Trash that Drifts
Indonesia Government Frames Formal Response to Video Showing Plastic Trash Inundation at Manta Point, Nusa Penida
To the Visitor, Goes the Spa
Harper Bazaar Singles Out 8 Spas for ‘Star Spa’ Status in Bali
All [News]!