Garuda Indonesia Focused on Contract Renegotiation, GCG

The national flag carrier Garuda Indonesia Airlines has continued to focus on renegotiating contracts and implementing Good Corporate Governance (GCG), despite an alleged involvement of the airline’s ex-president Emirsyah Satar in aircraft engine purchase graft case. “It doesn’t interfere because Garuda had been focusing on GCG, contract renegotiation and cost efficiency since the last two years,” President and CEO of PT Garuda Indonesia Tbk Arif Wibowo said here on Tuesday.

The airline had conducted major renegotiation of contracts, including the contract on airplane procurement from 2004 to 2014, a period during which Satar ran the enterprise, Wibowo added. “If the graft case is proven, it would be a good lesson for the management,” he noted.

The contract renegotiation has resulted in a major cost efficiency for the company, he pointed out, adding that Garuda has redesigned its fleet plan every 10 years.

“Now we are focused on how the three cost components, namely leasing cost, insurance cost and maintenance cost could be renegotiated,” Wibowo remarked. Minister of State-owned Enterprises expected Garuda Indonesia to have high integrity and good corporate governance in its operation.

“These have become our foundations in running the enterprise,” he added. Earlier, the Corruption Eradication Commission (KPK) had named Satar as a suspect in the graft case.

Satar had allegedly received 1.2 million euros and US $180,000, or a total of Rp20 billion, in bribes. He also received goods worth $2 million in Singapore and Indonesia from the UK-based manufacturing giant Rolls Royce for the purchase of 50 Airbus SAS aircraft engines during the period from 2005 to 2014 for PT Garuda Indonesia Tbk.