Garuda Settles with Rolls-Royce
Indonesian flag carrier Garuda Indonesia has dropped a lawsuit against Rolls-Royce and Rolls-Royce Total Care Services, the flag carrier has noted in a stock exchange announcement.
Originally filed in 2018, the lawsuit claimed damages from the British engine OEM for alleged fraud, and sought cancellation of a Total Care maintenance contract for Rolls-Royce Trent 700 engines.
In May 2020, former Garuda Indonesia chief executive Emirsyah Satar was sentenced to eight years in prison and fined approximately $1.4 million on bribery and money laundering charges relating to his tenure at Garuda from 2005 to 2014.
The court ruled that Satar had received approximately $3.4 million to sign off orders for Airbus A330 and A320 aircraft and Rolls-Royce Trent 700 engines.
However, a restructuring Garuda appears ready to draw a line under the saga.
According to Bisnis.com, Garuda stated in a Bahasa-language exchange filing that under its settlement, “Garuda will carry out the contents of the agreement that has been agreed with Rolls-Royce before the mediator, and withdraw the lawsuit.”
With most of its fleet on lease and additional state support hinging on overhauling its cost base, at the start of this year Garuda was contemplating returning more than two-thirds of its fleet – about 100 aircraft.
It is believed that returns for about half of these have now been agreed with lessors, including Aercap, which in August repossessed eight Boeing 737s in return for dropping an Australian lawsuit it had filed against Garuda.
The 737s have been flown to the desert in Australia for storage.