Last month, three state-owned banks approved the idea of debt restructuring for the carrier. Garuda Indonesia has been developing a strategy to resolve its debt problems, having posted a net loss of USD2 billion for 2020 and confirming USD3.4 billion worth of short-term liabilities. A legal representative of My Indo Airlines confirmed the lawsuit in a statement but declined to provide further information. No details on the scale of the debt have been reported. PKPU is a court procedure in Indonesia that debtors or creditors can initiate to seek settlement and avoid bankruptcy. Garuda’s chief executive, Irfan Setiaputra, said in the statement that the airline was studying a Debt Payment Obligation Postponement (Penundaan Kewajiban Pembayaran Utang - PKPU) proposal that My Indo Airlines had submitted together with a consultant. The embattled flag carrier assured in a statement that the court summons had no immediate impact on its operations and that flights would continue as before. The first appearance before a judge is set for July 27 at the Commercial Court of Central Jakarta. My Indo Airlines (2Y, Jakarta Halim) has sued Garuda Indonesia (GA, Jakarta Soekarno-Hatta) for allegedly failing to pay a debt to the cargo carrier, local media reported on July 19.
