The planes will be used for services to countries including South Korea, Japan and Australia, Elisa Lumbantoruan, finance director, said by phone today. The deal is valued at $2.5 billion based on average list prices. Carriers usually get discounts for large orders.
The accord, signed during a visit by U.K. Prime Minister David Cameron to Indonesia, boosts Garuda’s backlog of orders for Rolls-Royce Holdings Plc-powered A330s to 21, Airbus said in a statement. PT Lion Mentari Airlines, Indonesia’s biggest low- cost carrier, also signed a record contract for 230 Boeing Co. (BA) aircraft in February because of rising demand.
Garuda plans to fund the purchase using cash, proceeds from last year’s initial public offering and loans, Lumbantoruan said. The airline flies to 31 cities in Indonesia and 19 overseas, according to its website. It has 14 A330s in service, Airbus said.
The carrier fell 3.2 percent to 600 rupiah at the close of trading. The Jakarta Composite index slid 0.5 percent.
Cameron attended the signing ceremony, along with Indonesian President Susilo Bambang Yudhoyono during a trade visit. Toulouse, France-based Airbus makes wings at a factory in Wales and has a design center near Bristol in England.
The deal “is great news for the UK aerospace industry,” he said in a statement released by his office.
Garuda’s 2011 net income rose to 805.5 billion rupiah ($88 million) from 515.5 billion rupiah a year earlier, Chief Executive Officer Emirsyah Satar said March 21. Passenger numbers rose 36 percent to 17.1 million.
Indonesia may spend at least 3 trillion rupiah on airports in 2012, Herry Bakti Gumay, director general of aviation at the transport ministry, said Dec. 7. Airlines in Indonesia carried 68.1 million passengers last year, compared with 58.3 million a year earlier, according to the ministry’s data.
To contact the editor responsible for this story: Neil Denslow at firstname.lastname@example.org