End of the road for Garuda ?

Indonesia’s national airline, Garuda Indonesia, is going through a period of unprecedented turbulence, marked by a double blow that is shaking its financial foundations and its international brand image.

First, the carrier recorded a staggering net loss of 5.4 trillion rupiah (approximately US$318 million) for fiscal year 2025, a deficit nearly five times greater than that of the previous year.

Adding to this financial collapse is a major symbolic sanction: the loss of its prestigious 5-star Skytrax rating, downgrading the company in the global service quality rankings.

While this downgrade suggests a decline in status, analysts point to systemic structural pressures rather than a simple internal management failure.

Indeed, the Indonesian aviation industry as a whole is being strangled by soaring operating costs, particularly the price of kerosene and the volatility of the local currency against the dollar, affecting almost all players in the country.

This context of systemic crisis is forcing Garuda to undergo a restructuring in 2026, at the risk of seeing its role as a national flagship further erode in the face of increasingly aggressive regional competition.