UPDATED: Garuda ends leases on Bombardier planes

(Adds comments from Nordic Aviation) Indonesia’s flag carrier Garuda Indonesia said it has ended a Bombardier leasing contract with Nordic Aviation Capital A/S and will return a 12 CRJ jets amid an ongoing bribery probe, according to a report from Bloomberg and local Indonesian media. The airline ended the contract on 1 February after a series of negotiations on price with Nordic Aviation failed, according to President Director Irfan Setiaputra. The 12 planes under the contract, originally set to mature in 2027, are currently grounded at the Soekarno-Hatta International Airport, Setiaputra said in a virtual press briefing on Wednesday (10 February). Garuda is also negotiating with Export Development Canada on an early settlement for the lease of six other Bombardier planes. It cited the ongoing bribery probe against Bombadier and efficiency measures during the pandemic as reasons for terminating the deal. The United Kingdom’s Serious Fraud Office is investigating Bombardier’s dealings with the Indonesian airline over “suspected bribery and corruption” in Garuda’s order for Bombardier CRJ 1000 regional jets, according to Bloomberg. Following the initial reports of Garuda’s actions, Nordic Aviation Capital (NAC) issued a statement. The leasing company said “Garuda 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 NAC. Subsequently Garuda selected NAC to provide a further 12 CRJ-1000 aircraft under a lease agreement which ends in 2027…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 wrongdoing on the part of NAC in relation to the placement of the aircraft. Last year, in light of the global pandemic and Garuda’s difficult trading environment, NAC had extensive discussions with the airline to help the their cash position during the crisis. NAC has continued these discussions but there has been no agreement to date and no termination notice has been received. The lease agreements thus remain in full force and effect and NAC expects Garuda to continue to honour its contractual commitments. While NAC is sympathetic to the commercial difficulties of Garuda, it is confident of its position and absolutely determined to protect its commercial interest.” For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]