Expansion of Garuda Indonesia

The Expansion of PT Garuda Indonesia Tbk (GIAA) it seems never stop. Now, this government airline targets will add the fleet to 450 units in the next 5 years.This amount almost tripled from the fleet amount owned by Garuda. Now Garuda has 175 fleet units. Menteri Badan Usaha Milik Negara (Minister of State Owned Enterprises) Rini Soemarno support this ambitious plans.

Expansion of Garuda Indonesia

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Now Garuda is The most fleet units airline in Indonesia. This amount has not been added 65 plane units which on booking stage. From the number of plane, the nearest competitor of Garuda’s is Air Asia. Tony Fernandes is the owner of Airasia from Malaysia has 169 plane units. If Garuda can realize the plans to have 450 plane units, it’s will make GIAA can be the 5th largest Airline in the world (from the fleet)

Garuda must invest until $41,25 billion ( 545 Trillion Rupiah ) in the next 5 year to realize that aggressive plans. The problem, Garuda authorized capital until Maret month 2015 just reach until $874,23 Million or 2,12% from the total funds needed. While, the debt reached until 1,28 times from the capital. It means, Garuda just can get an additional loan $6,88 billion because Garuda have an agreement with one of creditor to can keep the debt ratio to equity (Debt-Equity Ratio) not more than 10,5 times. And Garuda must keep their interest coverge ratio in level 1 times.
So, it make question whether Garuda Airline plans to have 450 aircraft economically and finance viable?