Garuda Indonesia to Reduce Number of Board of Commissioners

JAKARTA, KOMPAS.com – Indonesian Minister for State Owned Enterprises (BUMN) Erick Thohir has announced that he will reduce the number of commissioners to run flag carrier Garuda Indonesia, as the airline struggles with its Rp. 70 trillion ($4,911,886,000) debt.

The former Inter Milan boss cited fellow tycoon and Garuda Commissioner Peter Gontha’s plan.

In a letter to Garuda Financial Director Prasetio, Peter proposed Garuda’s commissioners defer their salaries until Garuda’s next shareholder meeting to cut costs and ease the airline’s plight.

“I think Peter’s idea is worth thinking about. We are considering reducing the number of commissioners from five to two or three,” Erick said.

Also read: NAC Denies Corruption Allegations in Garuda Airplane Procurements

“If [Garuda] wants to cut costs, they should do so at the highest levels. Offering early retirement to employees but retaining the number of commissioners is not enough, while reducing the number of commissioners truly reflect the company’s commitment to cut costs.”

Erick estimated that reducing Garuda’s commissioners will take about two weeks, and will need the approval of a shareholders’ meeting (RUPS), as the airline is a publicly listed company.

Garuda Independent Commissioner Yenny Wahid expressed her support for the move. “I support efforts to streamline costs for Garuda. Our focus now is on rescuing the state airline,” said the political activist and daughter of late Indonesian President Abdurrahman Wahid.

“I am certain that Garuda can be saved.”

Also read: Indonesian Rock Star Abdee Slank Appointed As Telkom Commissioner

In his letter to Garuda, Peter Gontha expressed the Board of Commissioners’ concern over Garuda’s financial state and current condition.

These include a lack of cost-cutting measures, information on negotiations with lessors, evaluation or changes to unprofitable destinations, and unaccounted cash flow.

The former Indonesian ambassador to Poland also highlighted the commissioner’s lack of involvement in running the company and minimum work hours of five or six hours a week.

Garuda Indonesia currently has five commissioners on its board. They are made up of President Director Triawan Munaf, Vice President Chairul Tanjung, Commissioner Peter F. Gontha, as well as Independent Commissioners Yenny Wahid and Elisa Lumbantoruan.

Garuda Indonesia has been hit hard by Covid-19, as the pandemic brought about travel restrictions, reduced passenger numbers, and forced the reduction of destinations, particularly international destinations.

(Writers: Yohana Artha Uly, Rully R. Ramli | Editors: Ambaranie Nadia Kemala Movanita, Erlangga Djumena)

Sources: 

https://money.kompas.com/read/2021/06/02/130107726/erick-thohir-bakal-pangkas-jumlah-komisaris-garuda-indonesia-untuk-efisiensi?page=all#page2. 

https://money.kompas.com/read/2021/06/02/201100626/selamatkan-garuda-yenny-wahid-dukung-pemangkasan-jumlah-komisaris.