Distressed flag carrier Garuda Indonesia plans to cancel billions of dollars worth of aircraft orders from Airbus SE and Boeing Co. as part of a court-supervised debt restructuring to slash its debt and weather a slump in air travel due to the pandemic.
The state-owned carrier wants to cancel its order for nine A330-900 jets and four A330-800s, Finance Director Prasetio said following a meeting with creditors in Jakarta on Tuesday. The order is worth more than $1 billion, based on prices provided by aircraft appraiser Avitas Inc.
Garuda is also using the court process to move forward with the cancellation of the remaining 49 Boeing 737 Max 8 it has on order, Prasetio said. The carrier has said since as early as 2019 that it would walk away from the deal following two fatal crashes and the global grounding of the single-aisle jet. It only took one Max from its original order for 50.
Garuda plans to keep its order for 25 A320 aircraft, Prasetio said.
An Airbus spokesman said the manufacturer couldn’t comment on Garuda’s ongoing restructuring process. A Boeing representative didn’t immediately respond to a request for comment.
Garuda aims to cut its debt to about $3.4 billion from close to $10 billion and renegotiate terms with aircraft lessors.