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Garuda told to break lease over 12 Bombardier aircraft amid financial stress, graft probe
The government intervention is part of a briader effort to save the financially and legally embattled national carrier.
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Garuda Maintenance Facility (GMF) AeroAsia technicians check Airbus A330-300 aircraft bearing Garuda Indonesia livery in a hangar at Soekarno-Hatta International Airport in Tangerang, Banten. (JP/Jerry Adiguna)
T
he State-Owned Enterprises (SOEs) Ministry has ordered Garuda Indonesia to terminate its lease over one dozen Bombardier CRJ1000 NextGen planes and and return the aircraft amid the flag carrier’s ailing finances and a corruption probe that has implicated the Canadian aircraft manufacturer.
SOEs Minister Erick Thohir said on Feb. 10 that Garuda was negotiating with the aircraft's lessor, Denmark’s Nordic Aviation Capital (NAC), on early termination of its contract, slated to end in 2027.
Erick said the 12 leased CRJ1000s represented a major cost-cutting opportunity because Garuda found the aircraft especially unprofitable during the COVID-19 pandemic and because of the ongoing bribery investigation into the aircraft's procurement.
“There are two issues. First is the legal case. That is clear. Then there is the force majeur. This COVID-19 situation is force majeure. So it's fair for us to stand up straight,” Erick told a virtual press conference last Wednesday.
In May 2020, the Jakarta Corruption Court found former Garuda Indonesia president director Emirsyah Satar guilty of accepting Rp 49.3 billion (US$3.5 million) in bribes and laundering Rp 87.5 billion to procure 50 aircraft between 2005 and 2014, including the Bombardier aircraft.
Six months later in November 2020, the United Kingdom’s Serious Fraud Office (SFO) announced it was investigating Bombardier over suspected bribery and corruption related to the Garuda lease.
While the SFO did not provide further details, Bombardier’s third-quarter financial report said the investigation concerned Garuda’s acquisition and lease of the CRJ1000 in 2011-2012.
