Garuda moving forward
Not so long ago, glad tidings were heard about an injection of IDR 7.5 trillion of state equity from the Government for Garuda Indonesia. The question is, can such funds cover the IDR 190 trillion debt? Absolutely not.
The capital injection is a minimal tactical fund to settle financial problems with certain lessors and vendors and cover litigation in the courts of the country of origin. Part of it is also used to find additional aircraft leases, considering that current domestic and cargo markets are starting to gallop.
More good news is that the Chinese Government now allows its citizens to travel overseas. Garuda Indonesia, including its low-cost brand Citilink, once enjoyed a lucrative success in the prepandemic era by attracting Chinese charter flights from Xian, Beijing and Shanghai to Manado, Bali and Tanjung Pinang. An incredible story, worth repeating.
Thailand, as an illustration, could attract 11 million foreign tourists from China in normal conditions. We have a neighboring country, Australia, whose people love traveling to Bali. And there is Japan.
However, I am more concerned about Garuda Indonesia tapping into the domestic market first, considering that several cities, such as Surabaya, Semarang, Balikpapan and Makassar, have the potential to become Garuda Indonesia’s golden goose. In other words, do not use the IDR 7.5 trillion capital injection for unproductive matters such as constructing new buildings, renting new cars for the crew and so on.
Garuda’s crisis is far from over. All staff must understand that Garuda Indonesia is unwell.
In my analysis, the struggle and recovery period will last 4-5 years. But the employment ratio has also become slimmer, from 12,000 in its heyday to only 4,500 today.
Hopefully, the trimmed-down number of employees can make Garuda Indonesia more agile, enabling it to fight in the domestic market. Fierce opponents are awaiting Garuda Indonesia, such as Pertamina’s Pelita Air to the increasingly aggressive Trans Nusa. And don’t forget the Lion Air Group.
The point is Garuda Indonesia must not surrender. Its 74- year history has proven that Garuda Indonesia is able to overcome problem after problem. Garuda Indonesia has proven its perseverance, for it has traveled across five continents.
Problems are a dime a dozen. They should be seen as challenges. After all, the Government, in this case, the SOE Ministry, will stand by Garuda Indonesia’s side every time.
Nevertheless, Garuda Indonesia should not be precocious. It must fight. Keep Bung Karno’s words in mind: Travel to all continents until the end of time.