Indonesia’s national carrier, Garuda Indonesia, has reached an agreement to return 9 Boeing 737-800s aircraft to the leasing company AerCap, the company’s chief executive Irfan Setiaputra told Reuters on 2nd August 2021.
According to the agreement, the nine aircraft produced in 2014 and 2015 were leased from Aercap. Garuda had initially leased the planes for 12 years.
The planes are turned back ahead of schedule due to financial difficulties. AerCap had previously threatened the airline with legal action after it failed to pay for the planes.
On June 4, 2021, Aercap filed a bankruptcy lawsuit against Garuda Indonesia in the Supreme Court of New South Wales, claiming that it had failed to pay the lease of several aircraft. The airline agreed to enter into out-of-court negotiations to resolve the cases separately.
It looks as if a deal was reached on July 28th, when the two companies signed a deal to stop legal proceedings.
The agreement includes the return of nine Boeing 737-800s aircraft leased to the airline from AerCap.
Although the exact details are still being ironed out, the aircraft will fly to an “approved location,” according to the legal filing.
The airline operates 72 leased 737-800NG aircraft as part of its fleet of 136 aircraft. However, this number is rapidly shrinking due to financial difficulties. The airline has already agreed to return two 737-800s to lessors in June.
Also, Garuda has been brought to an Indonesian court after failing to pay a debt to PT My Indo Airlines.
Garuda is trying to bring back surplus planes due to travel disruption caused by the COVID-19 pandemic, and is seeking early termination, vacation rentals or hourly payment plans in a bid to reduce its fleet size and cut costs, at a hearing in Parliament.
As of June, Garuda had returned 20 planes to lessors and was negotiating to return more.
Garuda is flying only 41 aircraft out of 142 in its fleet due to reduced travel demand due to the pandemic.
The airline also said it wanted to maintain a workforce in line with the number of aircraft.