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Weathering the storm within Garuda Indonesia
Garuda desperately needs an independent and effective audit committee, one that takes all employees under its wing. In the capable hands of the new management team and with the principles of GCG as their compass, Garuda Indonesia should be able to plot a course out of the storm within and into the clear skies ahead.
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New aircraft, new CEO: Luxury cars line up in the GMF hangar to welcome Garuda Indonesia’s newly arrived Airbus A330-900 Neo at Soekarno-Hatta International Airport in Tangerang, Banten. The national flag carrier has a new chief executive officer and a new chief commissioner. They both bear the responsibility for restoring the company’s tarnished credibility. (JP/Dhoni Setiawan)
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ollowing months of violent turbulence, the winds of change cannot come soon enough to Garuda Indonesia Airlines. After showing Gusti Ngurah Ari Askhara the door over an alleged Harley-Davidson smuggling last December, the publicly listed national flag-carrier took off last week with Irfan Setiaputra, a seasoned corporate executive, as its new president director and Triawan Munaf, the former head of the Creative Economy Agency, as chairman of the board of commissioners.
State-Owned Enterprises (SOEs) Minister Erick Thohir made it clear that the first order of business for the new management would be to restore good corporate governance and the company’s image.
Garuda went through some jolting turbulence year last year. In June, the Financial Service Authority caught the company window-dressing its 2018 financial statements. The carrier was later fined and forced by regulators to “fix and restate” its financial report.
After correcting for accounting errors, the new results showed an astounding US$179 million net loss from a purported $800,000 profit in the previous report.
The carrier’s marketing and public relations team has not been doing much better either. In the month after the accounting scandal, they shot themselves in the foot trying to silence a complaint from a business class passenger by filing defamation charges against the restaurateur and YouTuber.
Social media empowered customers have often complained about the carrier’s crumbling quality, especially about in-flight catering, once a source of pride for the company.
Erick is correct to point to poor corporate governance as the culprit at Garuda. The window-dressing scandal could have been averted had the management heeded the minority shareholder’s dissent at the Garuda shareholders’ meeting last April.
