Garuda Indonesia Cuts Ties with Bombardier after Heated Negotiations

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  • Garuda Indonesia launches its Airbus A330-900neo aircraft which has a mask feature on its nose at GMF AaeroAsia in Soekarno-Hatta Airport, Tangerang, Banten, Thursday, October 1, 2020. The mask feature was made by 60 workers for 120 hours. ANTARA/Muhammad Iqbal

    Garuda Indonesia launches its Airbus A330-900neo aircraft which has a mask feature on its nose at GMF AaeroAsia in Soekarno-Hatta Airport, Tangerang, Banten, Thursday, October 1, 2020. The mask feature was made by 60 workers for 120 hours. ANTARA/Muhammad Iqbal

    TEMPO.CO, Jakarta - State-owned Enterprises (SOEs) Minister Erick Thohir assured that Garuda Indonesia will no longer operate 12 of its Bombardier CRJ 1000 aircraft that are initially leased from the Nordic Aviation Capital (NAC).

    This decision was taken arbitrarily by the government following heated negotiations with NAC as the lessor.

    “We refuse to be harassed. First, the Bombardier is entangled in a legal case, secondly, this is a force majeure situation due to the pandemic,” said Erick Thohir in an online press conference on Monday, February 10. 

    Garuda Indonesia has reportedly been involved in a lengthy negotiation to break the contract with NAC and has repeatedly negotiated with NAC’s higher-ups.

    The state-owned air carrier argued that the use of Bombardier CRJ 1000 is no longer effective as the aircraft’s characteristics are a far fit from the typical Indonesian consumer. They stated that the plane’s limited capacity of 96 seats and baggage capacity were the main factors. 

    Garuda Indonesia claimed that since operating the Bombardier, the air carrier has lost up to US$30 million annually which has burdened the company, especially amidst the Covid-19 pandemic. Bombardier’s legal case involving the Serious Fraud Office (SFO) was also said to be one of the main reasons behind this decision. 

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