Garuda to return 12 Bombardier CRJ1000s to NAC, end contract

Jakarta Garuda Indonesia has decided to return 12 Bombardier CRJ1000 planes to Nordic Aviation Capital (NAC) and terminate the leasing contract, which was scheduled to expire in 2027, State-Owned Enterprises Minister Erick Thohir said.

“Of course, we have (reasons) underlying the decision. We know how we consider good, transparent, accountable, and professional corporate governance,” he said during an online press conference here on Wednesday.

In making the decision, Garuda Indonesia has taken into account an investigation by the Indonesian Corruption Eradication Commission (KPK) and Britain’s Serious Fraud Office (SFO) into allegations of graft in the procurement of planes in 2011, the minister informed.

In addition, the decision to terminate the leasing contract is part of maintaining cost-efficiency, he said.

“The COVID-19 pandemic still continues not only in Indonesia, but also in many other countries this year. So efficiency is the key,” Thohir remarked. The minister said Garuda Indonesia is currently one of the airlines that has signed the most leasing contracts in the world.

“Of course, both Garuda and NAC have repeatedly negotiated (on the issue). Unfortunately, early termination (of the leasing contract) has yet to receive a response,” the minister said.

Meanwhile, Garuda Indonesia president director Irfan Setiaputra said the national flag carrier is operating 18 Bombardier planes of which 12 have been leased under the operating lease scheme, which ends in 2027.

“If we terminate it (now), until the end of the contract period (in 2027), we will be able to save more than US$220 million. This is part of the effort to curtail losses from the use of these planes at Garuda Indonesia,” he added.

The remaining six Bombardier planes have been leased under a financial lease scheme from Export Development Canada (EDC). Both sides are also in the process of negotiating the continuation of the leasing contract, which ends in 2024.

Setiaputra said Garuda Indonesia has also decided to operate Boeing 737s on the Bombardier CRJ planes’ flight routes.

“We also have no immediate plan to buy new planes to replace them, so we will make optimum use of the existing planes,” he added.

 

 

Source: Antara News

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