The Indonesia government is tabling a $1 billion bailout plan for its flag carrier Garuda as it looks set to default on debt repayment.
The package will help the airline restructure its debt and provide a new bridging loan of about $500 million for working capital for the next six months.
The airline had been in talks with banks about refinancing and secured $384 million in loans and credit lines earlier this month.
The airline is still majority owned by the government and comes under the oversight of the ministry of state-owned enterprises.
"Garuda remains a good company with bright prospects. Its business will remain robust after the outbreak ends," said deputy state-owned enterprises minister Kartika Wirjoatmodjo.
Garuda has already cut employee salaries and has renegotiated some aircraft lease agreements.
Foreign tourist arrivals plummeted 64% in March to less than half a million.
That is the lowest level for more than a decade.
