Technicians prepare a Garuda Indonesia plane for a test flight using sustainable aviation fuel on Oct 27, 2023, at Soekarno-Hatta International Airport in Tangerang, Banten. - Photo: Antara file
JAKARTA: Tensions have risen between flag carrier Garuda Indonesia and its pilots over disputes regarding the new leadership’s hiring policy.
The Garuda Pilot Association (APG), part of Garuda’s employee union, has urged President Prabowo Subianto and State-Owned Enterprises (SOEs) Minister Erick Thohir to conduct a thorough evaluation of the newly appointed management at the airline.
This was following the recent recruitment of several former employees of Lion Air, the country’s largest private airline, a move APG described as one of the main sources of conflict between management and staff.
“We’ve identified several irregularities in the recruitment process that must be reviewed, particularly from a good corporate governance standpoint,” APG vice president Rendy Wiryo Kusumo said on Monday (May 26), as quoted by Tempo.
Mufti Anam, lawmaker at House of Representatives Commission VI, which oversees SOEs, raised similar concerns during a meeting in May, citing unverified reports that the new hires were paid from Rp 25 million (US$1,538) to Rp 117 million, adding roughly Rp 1 billion to Garuda’s monthly payroll expenses.
The pilots union deemed the amount as unusual and criticized the move as inconsistent with a push from the government and the company for cost efficiency, urging management to conduct an evaluation to ensure the airline’s business sustainability, particularly in upholding safety standards and delivering top-tier service to customers.
Garuda saw a US$75.9 million net loss in the first three months of this year, its financial statement shows. Last year, it saw a $29.9 million net loss.
The airline had just averted bankruptcy after it acquired creditor approval to restructure its liabilities in mid-2022.
The hiring decision also raised eyebrows, as Garuda Indonesia’s current CEO Wamildan Tsani Panjaitan, appointed by the SOEs Ministry in November of last year, is a former CEO of Lion Air.
Beyond the hiring controversy, the union has also flagged poor communication between Garuda’s management and employee representatives.
APG accused the management of viewing the union as an adversary rather than a strategic partner, noting that the company even reported several union leaders to the police over public statements.
The union further condemned the abrupt halt of automatic payroll deductions for union membership fees, interpreting the move as a sign of bad faith that further strained labour relations.
Garuda’s responses Responding to the pilot union’s demands, Garuda Indonesia’s director of human capital and corporate services Enny Kristiani defended the company’s recruitment process, saying it was carried out in line with internal policies and aimed at accelerating the airline’s ongoing transformation.
“The recruited employees are on fixed-term contracts. Their compensation is determined based on company guidelines and aligned with prevailing market benchmarks,” Enny said in a statement on Tuesday (May 27).
She emphasised that Garuda remains committed to maintaining open communication with its employees, including union representatives and that it continues to provide operational support for union activities.
Regarding the suspension of automatic payroll deductions for union membership fees, Enny said the policy has been in place since last year.
The goal, she added, is to uphold union independence and return the decision to join a union directly to employees.
The company also confirmed that it had filed police reports against three individuals who, it claims, represented themselves as union members and spread misinformation about the recruitment process.
“The dissemination of false information has damaged the company’s credibility among investors, customers and employees,” Enny said. - The Jakarta Post/ANN
