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Clock Is Ticking for Garuda With Cash Pile Thinning Fast

  • Indonesian airline posted a first-half loss of $713 million
  • Flag carrier is still talking with government on financial aid
An engineer works on an aircraft engine at PT Garuda Indonesia's maintenance facility at Soekarno-Hatta International Airport in Cengkareng, near Jakarta, Indonesia.

An engineer works on an aircraft engine at PT Garuda Indonesia's maintenance facility at Soekarno-Hatta International Airport in Cengkareng, near Jakarta, Indonesia.

Photographer: Dimas Ardian/Bloomberg

Updated on

Indonesia’s flag carrier needs cash fast as losses soar past a half-billion dollars and unpaid bills pile up, yet negotiations for government aid move slowly and still may not yield enough to cover the shortfall.

A first-half loss of $713 million, announced last week, was just the latest piece of bad news for PT Garuda Indonesia. The airline already missed a payment on an asset-backed security in late July, shortly after extending the repayment of a $500 million sukuk -- an Islamic bond -- by three years because of its cash crunch. And it’s facing a lawsuit in London over aircraft rental fees. One measure shows Garuda at risk of bankruptcy.