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UPDATE 1-Garuda Indonesia terminates lease for 12 Bombardier aircraft

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(Adds statement from Nordic Aviation Capital)

JAKARTA, Feb 10 (Reuters) - Indonesian flag carrier PTGaruda Indonesia has terminated a lease for 12Bombardier CRJ-1000 planes amid a bribery probe into theprocurement of the aircraft, a cabinet minister said onWednesday.

The contract with Nordic Aviation Capital (NAC) wasinitially due to end in 2027, but Garuda will return the planesto the lessor early, State-Owned Enterprise Minister ErickThohir said.

"There are two issues, first was obviously the legal case,and the second is a force majeure because of the COVID-19situation," Erick told a virtual briefing.

In its decision for the early termination, Garuda took intoconsideration the bribery probe conducted by Britain's SeriousFraud Office (SFO) over the procurement process of the planes in2011.

The SFO announced in November it was investigating Canadianindustrial group Bombardier over suspected bribery inairplane sales to Garuda Indonesia.

"For the avoidance of doubt, NAC is not party to anyinvestigation into the selection of the aircraft by Garuda in2012 and there has been no allegation of any wrongdoing on thepart of NAC in relation to the placement of the aircraft," NACsaid in a statement on Wednesday.

Garuda is also in discussion for early payment settlement ofits lease of six planes of the same model from ExportDevelopment Canada, which is supposed to end in 2024, Erickadded.

At the same briefing, the airline's chief executive IrfanSetiaputra, said Garuda had losses on average of more than $30million annually during the past seven years of using theCRJ-1000 aircraft.

"On top of that this pandemic forced us to end thiscontract," Irfan said.

NAC said it had not yet received a termination notice fromGaruda and therefore the lease agreements remained in fullforce, and it expected Garuda to continue to honour itscontractual commitments.

"While NAC is sympathetic to the commercial difficulties ofGaruda, it is confident of its position and absolutelydetermined to protect its commercial interest," the lessor said.(Reporting by Tabita Diela; additional reporting by Jamie Freedin SydneyWriting by Fransiska Nangoy; Editing by Martin Petty and BillBerkrot)