Garuda Indonesia trapped in a relentless financial tailspin

[serious_fun]

An article discussing the woes facing Garuda Indonesia.

By the end of 2025, roughly 40% of the Garuda Group’s fleet remained non-operational due to delayed heavy maintenance.

 

[pantaiema]

And according to the recent news, they are still making a Loss of Rp5,42T despite cash injection of Rp23,67T . For a reference other National Airlines such as Emirates, Qatar, Etihad, AIG, Lufthansa Group, Air France-KLM are still able to book profit.

Unless there is secret expenditure, it doesn’t seem logical given that operational and maintenance costs. renting an aircraft for national airlines are similar, while their staffs are paid less. I feel sorry to their lower rank staffs, stewardess, ground ticketing and boarding staffs etc

Kondisi Terkini Garuda Indonesia di Balik Rugi Rp 5,4 Triliun

PT Garuda Indonesia (Persero) Tbk (GIAA) membukukan rugi sepanjang 2025.

finance.detik.com

 

[Pak Tani]

Sounds like a great time to add 50 more planes to the fleet.

An ongoing polemic surrounds the recent Indonesia-United States Agreement on Reciprocal Trade. A highlight of this deal is Indonesia’s commitment to acquire 50 Boeing aircraft, valued at approximately US$13.5 billion.

 

[snpark]

Good for optics. Cancel next year now they got the tariff reduction

Delivery 2036 lol

 

[pantaiema]

In large procurement projects such as buying new aircrafts, the cost of depreciation is often understated or adjusted in a way that makes it less visible. However, for national fleets, every aircraft will eventually reach the end of its serviceable life and require replacement.

If the accounting only consider loan repayments along with operational and maintenance expenses while excluding or downplaying depreciation, the project can appear highly profitable on paper. It’s hardly surprising that a company like Garuda could report profits in 2022 after being deep in the red just a few years earlier, even with significant cash injections. When losses occur, they tend blame to external factors like the operating environment or rising fuel costs as convenient excuses. What they rarely acknowledge or attempt to downplay is that other national airlines have managed to remain profitable under the same environment.

Decades later, the executives who approved the purchase (and may have benefited from inflated pricing) are often no longer in those roles, sometimes having moved on to higher positions, while the long-term financial burden ultimately falls on the organisation and/or taxpayers. That is the difference between purchasing high value items using the government money, taxpayers vs purchasing by yourself.