Indonesian airline Mandala Airlines plans to buy 18 Airbus A320s worth USD$1.6 billion by 2014, in an effort to capture growing middle class travel in Southeast Asia's largest economy, its major shareholder said on Friday.
Mandala, which operates domestic routes and partners with minority shareholder Singapore's Tiger Airways for international flights, currently operates seven A320s. Mandala will use an existing Tiger option to buy the Airbus jets.
"Our target is to get two million passengers this year. We're adding more fleet and by the end of 2014 we should have 25 planes," said Sandiaga Uno, chief of investment firm Saratoga Investama Sedaya, which holds a 51 percent stake in Mandala.
The expansion plans are a turnaround for Mandala, which Saratoga and Tiger rescued in 2011 after it halted operations because of debt problems. They also underline fast growth and increasing competition for aviation in the world's fourth most populous nation.
Uno said the airline is now aiming for a 20 percent share in a market dominated by Lion Air, which recently agreed a record USD$24 billion order for Airbus planes.
Saratoga Investama is planning an initial public offering in the second quarter to raise capital to co-invest with its private equity affiliate Saratoga Capital.