JAKARTA (TheInsiderStories) - The dispute between the national carrier, PT Garuda Indonesia Tbk (IDX: GIAA), and Nordic Aviation Capital (NAC), a global aircraft leasing company, continues. In an official statement released yesterday, the lessor admitted it has received no termination notice and the national airlines needs to comply with its contractual obligations.
As reported, the state-owned firm has grounded and is returning its 12 Bombardier CRJ1000s to NAC before the leases have expired. The company made the decision to directly acquire six CRJ-1000 aircraft from Bombardier all of which Garuda has operated since 2012.
These aircraft were selected by Garuda prior to any engagement with the lessor. Subsequently, Garuda selected NAC to provide a further twelve CRJ-1000 aircraft under a lease agreement which ends in 2027.
“For the avoidance of doubt, NAC is not party to any investigation into the selection of the aircraft by Garuda in 2012, and there has been no allegation of any wrong doing on the part of NAC in relation to the placement of the aircraft,” wrote the management.
In light of the global pandemic and Garuda’ difficult trading environment, NAC had extensive discussions with the airline to help their cash position during the crisis.
The Denmark-based firm has continued these discussions but there has been no agreement to date, and no termination notice has been received.
Earlier, Indonesia’ state own enterprises (SOEs) minister, Erik Thohir, and CEO of the airlines, Irfan Setiaputra, announced that the 12 CRJ1000s were grounded on Feb. 1 and will be returned to NAC, even though the leases were only due to expire in 2027.
Setiaputra said, because of contract the carrier has been losing money around US$30 million per year. His party also speaking to Export Development Canada on the six purchased CRJ1000s and how it can achieve an early settlement on those aircraft which have a contract ending in 2024.
NAC is also the major lessor of 13 ATR 72-600s to Garuda and all operated. The deal with the lessors signed on February 2012 to lease six CRJ-1000 fleets with an option to take delivery of an additional 12 jets with total amount US$1.32 billion.
The aviation company then took the first delivery of the Canadian-made regional jet in October 2012. Bombardier delivered its last CRJ-1000 in December 2015. As a result of this lease cancellation, Garuda is required to pay an early termination fee and fulfill the technical conditions for aircraft redelivery. However, this offer was rejected by NAC and the company unilaterally terminated the contract for the 12 aircraft.
Earlier, British’ Serious Fraud Office confirmed its investigating plane producer, Bombardier, over suspected bribery and corruption in relation to contracts or orders from Garuda. The body wrote, “In accordance with best practices when such allegations come to our attention, we have launched an internal review conducted by external counsel and we are co-operating with the investigation opened by the UK Serious Fraud Office, which has contacted Bombardier further to the Indonesian judgements.”
Orders from the state-owned flight carrier for A330s and A320s had been among agreements probed during a long investigation into allegations of failure to prevent bribery focused on Airbus. Early of 2020, the Corruption Eradication Commission announced that former CEO of Garuda, Emirsyah Satar, was convicted of corruption and money laundering, sentenced to a term of imprisonment and fined.
He was convicted of having received bribe payments from another individual for support in securing contracts for Bombardier, Airbus, ATR and Rolls-Royce. In 2012, he order for 18 CRJ1000s in 2012 and the airline remains an operator of the type.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
