Use A CRJ1000 Aircraft, Garuda Boss: We Lost IDR 418 Billion, More Expensive Than Aircraft Rental

Garuda Indonesia bombardier aircraft. (Irfan Meidianto / VOI)

JAKARTA - The President Director of Garuda Indonesia, Irfani Saputra, said that his company continued to experience losses while operating the Bombardier CRJ1000 type aircraft. The loss is even greater than the aircraft rental price.

"It is undeniable that during the 7 years of operation every year, the cost of using aircraft is more than 30 million dollars per year or IDR 418 billion (in the rupiah exchange rate of Rp. 13,955 per US dollar). Meanwhile, the plane rental itself is 27 million dollars", he said, in a virtual press conference, Wednesday, February 10.

Furthermore, Irfan explained, the unilateral termination of the contract had been carried out since February 1, 2021 yesterday. With this step, he said, Garuda Indonesia's management could save on the losses incurred if the plane was returned in 2027.

"If we terminate in February until the end of the contract period, we will save more than 220 million US dollars. This is our effort to eliminate/reduce losses", he explained.

The CRJ1000 aircraft, he said, was also not suitable for the Indonesian market. Therefore, his party continues to experience losses during the operation of the aircraft.

"From year to year we experience losses using this aircraft, coupled with this pandemic condition, we have no other choice professionally to terminate this contract", he said.

Previously, State-Owned Corporation (BUMN) Minister Erick Thohir took a firm step by asking the management of PT. Garuda Indonesia.Tbk (Persero) to stop and return 12 Bombardier CRJ 1000 aircraft that had been chartered since 2012.

Erick said the basis for this decision was based on the consideration of indications of bribery in the agreement after the Corruption Eradication Commission (KPK) and the UK Serious Fraud Office (SFO) investigated this agreement.

Meanwhile, the Bombardier aircraft rental agreement totals 18 aircraft and 12 aircraft have been chartered by Garuda. The operating lease contract between Garuda and Nordic Aviation Capital (NAC) was signed in 2011 and will be completed in 2027.

"This decision also considers good corporate governance", he said.

In the investigation carried out by the KPK as well as the investigation by the British SFO, there were indications of bribery from the manufacturer to individuals who led Garuda Indonesia during the aircraft procurement process in 2011.

Garuda Indonesia management has also stopped the operation of the 12 bombardier planes on February 1, 2021. Previously these aircraft served short-distance routes in Eastern Indonesia.