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Smuggled Harley-Davidson parts cost airline Garuda's CEO his job

Successor will become troubled Indonesian carrier's fifth chief since 2014

Indonesia customs and excise officials found 15 unregistered pieces of cargo on board Garuda's aircraft. The items included several Harley Davidson spare parts. (Photo by Bobby Nugroho)

JAKARTA -- The president of national flag carrier Garuda Indonesia, Ari Ashkara, will be sacked for allegedly trying to evade taxes by smuggling motorbike parts and a premium bicycle into the country on a newly delivered plane, a government minister said Thursday.

Customs and excise officials announced on Tuesday that they found 15 unregistered pieces of cargo on board Garuda's new Airbus A330-900 neo aircraft that was delivered to Indonesia from France last month.

The items included several Harley-Davidson spare parts and a Brompton folding bicycle.

"The audit committee reported that the Harley-Davidson was believed to belong to a person named AA [Ari Ashkara]," said Erick Thohir, Indonesia's minister for state-owned enterprises.

"I am sad because when we try to lift the performance of SOEs, there are people in it who are not ready," said Thohir, who took on the role of minister in October. "For that reason, I will suspend the duties of [the] Garuda president director." He added that authorities will determine if others were involved.

Garuda Indonesia CEO Ari Askhara faces the sack. (Photo by Jun Suzuki)

Ashkara took over as president of the publicly listed but government-controlled carrier in September last year. He replaced Pahala Mansury, whose cost-cutting measures to improve the company's performance soured relations with unions, and was ousted just 17 months into his role.

Ashkara's successor will become Garuda's fifth president since 2014.

Ashkara's removal -- pending approval by shareholders -- comes at a tough time for the flagship carrier. Under Ashkara, the carrier turned a loss of $179.2 million for 2018 into a profit of $112.4 million for the nine months ended in September. But it was also in a power tussle with the country's third largest carrier Sriwijaya Group, with whom it had an alliance.

Garuda's low-cost carrier subsidiary Citilink took over operations of Sriwijaya last year after the group reported losses. Combined, they held 46% of Indonesia's domestic air travel market as of 2017. Lion Air was market leader with 51% share.

Both companies ended the alliance last month, as Sriwijaya sought independence again after returning to profitability earlier this year.

Additional reporting by Ismi Damayanti in Jakarta.

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