Garuda Indonesia Owes Employees $23 Million in Arrears

JAKARTA, KOMPAS.com – The toll that the Covid-19 pandemic is taking on Garuda Indonesia is becoming more apparent, after the Indonesian flag carrier revealed that it owes millions of dollars in arrears to its employees.

“We owe about Rp. 327.93 or $23 million to our employees at various levels as of December 31, 2020,” said the airline’s management on Wednesday, June 9, based on information from the Indonesian Stock Exchange (BEI).

The arrears decreased the lower the employees’ position. They ranged from:
1. 50 percent for the Board of Directors and Commissioners
2. 30 percent for Vice President, Captain, First Office and Flight Service Managers
3. 25 percent for Senior Managers
4. 20 percent for Flight Attendants, Experts and Managers
5. 15 percent for Duty Manager and Supervisors
6. 10 percent for Staffers such as Analysts, Officers and other equivalent positions, as well as apprentices.

The airline said the cost-cutting did not end there. “We are speeding up the termination of contracts with part-time employees and paying the pension of employees who has been working with us for 45 years or more as of 2020,” Garuda Indonesia added.

Also read: Garuda Indonesia to Reduce Number of Board of Commissioners

“We are also formulating the policy on Working From Home or Working From the Office [WFH/WFO] for our employees.” The airline added that it will pay the minimum revenue and negotiations with various parties to keep the company afloat.

These include “restructuring deals between the company and other state companies [BUMN] as well as a number of lessors to maintain business operations.”

KOMPAS/HERU SRI KUMORO A Garuda Indonesia CRJ1000

Recently, Garuda’s Board of Commissioners announced that they will refuse to take their salaries until the airline resolves its financial issues.

Business tycoon Peter Gontha proposed the idea, which was accepted by Minister of State Enterprises Minister Erick Thohir and fellow commissioners such as political activist Yenny Wahid.

Also read: Garuda Indonesia Returns 12 CRJ1000 Jets to Their Leasing Company

Garuda has incurred debts of more than Rp. 70 trillion ($4,991,866,000) because of the Covid-19 pandemic, corruption and financially questionable deals.

These include the arrest of former President Director I Gusti Ngurah Askhara or Ari Ashkara in 2019 for smuggling Brompton bicycles and Harley Davidson motorbikes.

The latter included the renting of 12 CRJ1000 jets from the Nordict Aviation Capital leasing company in 2011. Garuda Indonesia President-Director Irfan Setiaputra estimated that the deal cost the airline Rp. 420 billion ($30 million) in annual losses.

(Writer: Wahyuni Sahara | Editor: Bayu Galih)

Source: 

https://nasional.kompas.com/read/2021/06/09/17073491/garuda-indonesia-tunggak-gaji-karyawan-rp-32793-miliar?page=all#page2.