An Indonesian court today dismissed a case against Garuda Indonesia brought by creditor My Indo Airlines, providing some respite for the financially-troubled national carrier.

The Central Jakarta Commercial Court today rejected the petition against Garuda, arguing it is difficult to determine how much Garuda owes, something My Indo Airlines needed to prove in court, say Indonesian news reports quoting the court.

The court has decided that Garuda and My Indo Airlines, which is a cargo airline, should continue talks in an effort to reach an amicable settlement, arguing there is no evidence to suggest that Garuda is unable to pay, say the reports.

When My Indo Airlines first brought the case before the court, it said the amount it was owed was US$700,000 approximately, add the reports.

Garuda Indonesia today issued a statement in response to the court ruling in which its president director, Irfan Setiaputra, says: “Garuda will continue to focus on efforts to restructure its business obligations and operations.”

“In addition, the company strives to ensure that flight operations for passenger and cargo transportation run normally.”

Garuda is fighting for its survival because, based on its own financial disclosure, its liabilities exceed assets by US$4.7 billion.

Deputy minister of state-owned enterprises, Kartika Wirjoatmodjo, has told local Indonesian media that: “If we are stuck, we will have to close the airline since it is impossible for us to come in with state capital because the value of the debt is simply too large.”

Wirjoatmodjo says Garuda has 32 aircraft lessors, and whether the airline can reach an agreement with its creditors and avoid bankruptcy is still a 50-50 shot.

He also says: “Pelita Air Service [another state-owned carrier] is ready to replace Garuda because all of its shares are owned by Pertamina,” Indonesia’s state-owned oil and gas company.

A source at Pelita told Smart Aviation Asia Pacific on 14 October that Pelita will focus on the domestic passenger market and cover all the big and smaller cities with a fleet of Airbus A320s and also possibly ATR 72-600s.

Picture, from , shows Gardua A330s parked at Bali airport during the pandemic.