DALLAS – Indonesian flag carrier Garuda Indonesia (GA) wants to rejig the terms of its aircraft orders with manufacturers Airbus and Boeing.
Reuters reports that GA Chief Executive Officer, Irfan Setiaputra, told Boeing he is considering the option of canceling some orders. The decision was taken based on the carrier’s short-term demand forecast.
Garuda, which has been badly hit by the pandemic, is currently undergoing a debt restructuring process. The target is to reduce the current US$10bn debt to US$3.7bn.
To achieve such a target, the airline has undertaken a fleet restructuring plan with the goal of operating 66 aircraft instead of the 142 it utilized before the pandemic. GA is also renegotiating the terms of its aircraft on lease, planning for some early terminations.
Details on Airbus, Boeing Orders
With Airbus, GA has an order of nine A330-900 and four A330-800. The Indonesian carrier was one of the few airlines to order the -800 variant of the model back in 2021. As for the narrow-bodies, GA is said to maintain its order for 25 A320 model aircraft.
Concerning Boeing, GA placed an order for 50 Boeing 737-8 in 2014, at the time worth US$4.9bn. The airline took delivery of one aircraft in 2017. As early as 2019, following the Indonesian and Ethiopian MAXC crashes, GA said it would cancel the 49 remaining jets on order.
Garuda currently operates a fleet composed of a mix of Boeing 777-300ER for long-haul routes; Airbus A330-200, A300-300, and A330-900 for medium-haul; Boeing 737, Canadair CRJ1000, and ATR 72 for short-haul and regional markets.
Leasing Agreement Early Termination
In February, Bloomberg reported that GA returned one of its Boeing 777-300ER as part of an early termination agreement with the lessor, Altavair. On the occasion, Setiaputra said that the airline was seeking to return another aircraft of the same model in March.
He also stated that the company was intensifying its negotiations with other lessors on possible early termination agreements.
Featured image: Garuda Indonesia PK-GID Boeing 777-300(ER). Photo: Roland Rimoczi/Airways