Garuda Indonesia filed for Chapter 15 bankruptcy protection in the U.S. District Court for the Southern District of New York as the debt-laden airline attempts to secure future profitability.
The filing comes at a time when the airline, having completed a court-supervised debt restructuring in Indonesia, is trying to take advantage of a rebound in international travel.
Non-U.S. companies often file for Chapter 15 bankruptcy to ensure that they will not be sued by creditors in the U.S. or have their assets seized.
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Garuda’s total debt currently stands at about $5.1 billion, CEO Irfan Setiaputra told parliament in Jakarta on Monday.
Reviving the national airline is one of the Indonesian government’s top priorities, as the country relies on air transport for connectivity and to support its tourism industry.
The airline could earn net income of about $400 million next year and gradually increase its profit to $647 million by 2026, according to a projection by Indonesia’s Finance Ministry this month.
Photo: Masakatsu Ukon/Wikimedia
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