AerCap has terminated its bankruptcy lawsuit against Garuda Indonesia (GA, Jakarta Soekarno-Hatta), following the signing of a global side letter agreement to their original contract. Garuda has agreed to relocate nine leased B737-800s ahead of schedule as a result.
The deal, signed on July 28 and revealed in a stock exchange disclosure on July 30, will halt the lawsuit filed in June at the New South Wales Supreme Court in Sydney, Australia.
AerCap initially filed a lawsuit against the cash-strapped flag carrier in London in May 2020. The lessor owns nine of the sixty-seven B737-800s that Garuda operates, and all nine have been stored at Jakarta Soekarno-Hatta since early April 2020, the ch-aviation fleets module shows.
The aircraft will now be relocated to an approved location, according to the disclosure. Garuda Indonesia’s director of maintenance, Rahmat Hanafi, pledged in the filing that the airline management would ensure that all aspects of flight operations would continue as usual. The deal, he added, was the result of Garuda’s attempts to negotiate with AerCap on several occasions to resolve the matter peacefully.
CEO Irfan Setiaputra verified the agreement to Reuters on August 2 and said that the details of the B737s’ return were still being discussed with the lessor.
Aercap and Garuda Indonesia did not immediately respond to ch-aviation’s request for comment.
Separately, on August 3, Indonesia’s minister of state-owned enterprises, Erick Thohir, told CNN Indonesia TV that he would order Garuda to stop competing with foreign airlines on international routes and focus instead on working the local market. Confirming statements he made in early June, he said he wanted Garuda to focus on its local business because 78% of tourists in the country are currently domestic tourists.
“It is better for us to control domestic tourism. Garuda will focus on domestic,” he said, adding that international competition would be left to more powerful carriers, such as Qatar Airways, Emirates, and Singapore Airlines.
