Indonesia’s Garuda Expands Fleet With $840 Million ATR Deal

PT Garuda Indonesia (GIAA) will lease as many as 35 ATR 72-600 turboprop aircraft from Nordic Aviation Capital to modernize its regional fleet amid rising travel demand in Southeast Asia’s largest economy.

Garuda has signed a firm commitment for 25 of the planes, with options for 10 more, ATR said in a statement today. The deal is worth more than $840 million, and deliveries of the aircraft will start next month.

ATR, as the Avions de Transport Regional joint venture of European Aeronautic, Defence & Space Co. (EAD) and Finmeccanica SpA (FNC) is known, has booked 83 aircraft sales this year including the turboprops for Garuda it previously listed as being purchased by an undisclosed customer. The Toulouse, France-based aircraft maker is outselling rival Bombardier Inc. (BBD/B)

The turboprop planes will help Garuda increase its services to remote areas of Indonesia as the ATRs can land on airports with shorter runways, the carrier said in a separate statement.

The aircraft, which can seat up to 74 passengers, will accommodate 70 in Garuda’s configuration, said ATR, which has also sold its planes to Indonesia’s PT Lion Mentari Airlines.

About a 100 ATR aircraft will be operating in Indonesia in the next two years as the planemaker has won more than 85 orders from the country since 2008, it said in the statement.

State-controlled Garuda and rival Lion Air are ordering more planes as economic growth enables more of Indonesia’s 253 million people to travel by air. Domestic carriers flew 70 million passengers in 2012, up from 37 million in 2008, according to CAPA Centre for Aviation.

NAC, based in Billund, Denmark, in June placed an order for 90 of the European turboprops, including the smaller ATR 42-600 model. With the addition of the new aircraft, the company will manage a fleet of about 150 ATRs.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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