Garuda files for Chapter 15 in US as it seeks path to profit

PT Garuda Indonesia filed for Chapter 15 bankruptcy protection in the Southern District of New York court, as the debt-laden carrier tries to secure its future profitability. 

The document is dated Sept. 23. The submission comes as the airline, having completed a court-supervised debt restructuring in Indonesia to halve reduce its debt load, tries to capitalize on the rebound in international travel.  

Non-U.S. companies commonly file for Chapter 15 bankruptcy to ensure they won’t be sued by creditors in the U.S. or have assets seized there.

Garuda’s total debt now amounts to roughly $5.1 billion, President Director Irfan Setiaputra told parliament in Jakarta on Monday.

Reviving the national airline is a top priority for the Indonesian government, because the country relies on air transport for connectivity and to support its tourism industry.

The airline could post net income of around $400 million next year and gradually increases its earnings to $647 million in 2026, according to a projection by Indonesia’s finance ministry this month.