Indonesia's state airline Garuda hangs by a financial thread

Workers clean the body of a Garuda Indonesia Airbus A320 aircraft inside Hangar 4 of PT Garuda Maintenance Facility (GMF) Aero Asia at Soekarno-Hatta airport in Jakarta.

Indonesia’s government is under mounting pressure to resolve the financial crisis at the nation’s flagship airline, which faces an existential threat from COVID-19 after years of chaotic management and weak earnings.

Analysts say Garuda Indonesia may need at least $1.3 billion to $3 billion in fresh capital to survive. But with the government, its largest shareholder, reluctant to stump up the money, and uncertainties over debt negotiations, there is still no indication of how the company can be saved — two months on from its default on $500 million of Islamic sukuk bonds.

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief
Subscribe to Newsletter