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Garuda’s Restructuring to Test Confidence in Aviation Recovery

  • Airline and its creditors have 45 days to negotiate a deal
  • Debt recast to help slash Garuda’s $9.8 billion liabilities
A member of the ground crew attaches a luggage tag at Garuda Indonesia's check-in counters at Soekarno-Hatta International Airport.
A member of the ground crew attaches a luggage tag at Garuda Indonesia's check-in counters at Soekarno-Hatta International Airport.Photographer: Dimas Ardian/Bloomberg

A debt restructuring just getting underway at flag carrier PT Garuda Indonesia is forcing creditors to weigh short-term losses against the potential for gains further down the line in one of the fastest growing aviation markets in Asia. 

The airline is entering a court-supervised debt restructuring process after a Jakarta court on Thursday accepted a debt petition filed against it. Garuda and its creditors have 45 days to complete negotiations, which can be extended to 270 days.