Sriwijaya Air Severs Garuda Ties, Raising Safety Concerns

 - November 12, 2019, 9:15 AM
An 11-strong fleet at Indonesia's Sriwijaya Air includes six Boeing 737-500s. (Flickr: Creative Commons (BY-SA) by PK-REN)

Sriwijaya Air and regional subsidiary Nam Air face fresh calls of concern over air safety, security, and operational standards after severing their partnership with national carrier Garuda Indonesia. Confirming the split in a note, Indonesia’s Directorate General of Civil Aviation (DGCA) said Sriwijaya would stand subject to flight inspections from both the regulator and the airport authority to ensure flights operate to air safety standards.

"Sriwijaya Air and Nam Air are required to maintain airworthiness and [remain] safe for the operation of all aircraft operated," said DGCA director Polana Pramesti. “[They] must ensure that they will continue to provide quality to service users in accordance with standard operating procedures delivered to DGCA.” The DGCA added that Sriwijaya operates 11 aircraft on 32 routes.

Concerns about Sriwijaya’s on-again-off-again relationship with the national carrier surfaced last week after a statement from Garuda's director of maintenance and services circulated on Indonesian media, announcing the partnership had come to a halt. That saw Sriwijaya cancel flights without warning. Speaking to reporters over the weekend, Sriwijaya’s attorney and shareholder Yusril Ihza Mahendra accused Garuda of interfering with the carrier’s operations and imposing unfair stipulations over payments for airport services and maintenance.

Garuda, through its subsidiary Citilink, gained operational and financial control of Sriwijaya last year in an attempt to return the airline to profitability following a deep loss in 2017. At the time of the agreement, Sriwijaya had allegedly owed more than $175 million to various companies that included state-owned oil and natural gas corporation Pertamina, Bank Negara Indonesia, and airport operators Angkasa Pura I and Angkasa Pura II. The tie-up gave Garuda and Sriwijaya approximately 45 percent of the domestic market; the Lion Air Group held the rest.

Talks between the two parties broke down in September after Sriwijaya ended its partnership agreement by dismissing three senior directors seconded from Citilink without prior approval. On September 25, Citilink filed a lawsuit against Sriwijaya and Nam Air on behalf of Garuda, and on September 30, Garuda began removing its logo from Sriwijaya aircraft. The two sides reconciled less than a week later with the aim of restarting its five-year operational cooperation agreement.