Garuda Indonesia May Buy 50 Turboprops From ATR, Bombardier
06/27/2012| 08:47am US/Eastern
By Linda Silaen
JAKARTA--Indonesian flag carrier PT Garuda Indonesia (>> PT Garuda Indonesia (Persero) Tbk) may purchase 50 turboprop aircraft made by Franco-Italian ATR and Canadian Bombardier Inc.'s (>> Bombardier, Inc.) Q400, its chief executive said Wednesday.
Emirsyah Satar told reporters that it will decide on the purchase by the first half of next year. "The price of each plane may be around $16 million," Mr. Satar said.
He didn't elaborate on the reason for the possible purchase, although analysts said it may look to add turboprop aircraft to its fleet to serve Indonesia's remote areas.
Aircraft in the Turboprop segment are suitable for short and medium distance flights with a duration of up to four hours.
Analysts said about three quarter of airports across the country's 17,000 islands can only serve smaller aircraft, and demand for air transport is robust as purchasing power of the country's 240 million population continues to increase.
Garuda in February signed a deal with Bombardier to buy six CRJ1000 jets and has options to buy 18 more. It said then that it would also lease another 12 CRJ1000 jets.
Indonesian airlines -- Garuda being the only publicly listed company -- are aggresively expanding their fleets as the vast domestic market insulates the country from economic slowdown in the West.
The privately-held Lion Air, for example, ordered 27 additional ATR turboprops in February following an order of 230 Boeing 737, as demand picks up amid relatively robust economic growth.
Indonesian economy expanded 6.5% last year and government forecasts the growth level to be above 6% this year.
Write to Linda Silaen at email@example.com