Court denies My Indo Airlines bid to restructure Garuda debt
A panel of judges at Central Jakarta District Court has rejected an attempt by My Indo Airlines (2Y, Jakarta Halim) to forcibly restructure the debts of Garuda Indonesia (GA, Jakarta Soekarno-Hatta), as its lawsuit failed to contain the required amount of detail, a lawyer acting for the cargo specialist confirmed to journalists.
My Indo Airlines sued the embattled flag carrier in mid-July for allegedly failing to pay a debt, filing a Debt Payment Obligation Postponement (Penundaan Kewajiban Pembayaran Utang – PKPU) proposal – a court procedure that creditors can initiate to seek settlement while avoiding bankruptcy, broadly similar to the US Chapter 11 proceedings.
The size of the debt was not disclosed at the time, but the online newspaper Bisnis Tempo has since reported it to be a claim of around USD700,500. The final PKPU verdict should have been announced on October 14 but was postponed by one week until October 21.
“Our PKPU application was rejected,” My Indo Airlines’ lawyer Asrul Tenriaji Ahmad confirmed after the October 21 ruling. “There are matters that needed to be considered further because the debt is not an amount that is simple to prove.” However, the debt still stands, he added.
Garuda Indonesia released a statement after the verdict stressing: “Looking forward, Garuda will continue to focus on restructuring its business and operational obligations as well as ensuring normal flight operations for passenger and cargo transportation.”
A monthly performance report for Garuda Indonesia for January 2019 shows that the airline had officially launched a cargo freighter service in collaboration with My Indo Airlines that began operating on January 26 of that year. The service was operated with a fleet of Boeing freighters with capacity for 15 tonnes, operating 4x weekly to the Indonesia’s five main islands, Sumatra, Java, Sulawesi, Kalimantan (Borneo), and Papua.
According to the ch-aviation fleets advanced module, My Indo Airlines currently operates a fleet of five aircraft, one each of a B737-200(C), B737-300(F), B737-300(SF), B737-400(F), and B737-400(SF).
Garuda Indonesia posted a loss of around USD2 billion for 2020 with short-term liabilities amounting to USD3.4 billion. It has been restructuring its business and working on a new five-year plan. Chief Executive Irfan Setiaputra recently told ch-aviation that the airline is planning to simplify its fleet to just two families, B737s (NG and MAX) and A330s (ceo and neo).