Garuda Close To USD$2.5 Bln Airbus A330 Deal

Garuda and Airbus are close to a deal for the Indonesian airline to buy A330 passenger jets worth USD$2.5 billion at list prices, two sources familiar with the matter said on Tuesday.

The deal is set to be unveiled by British Prime Minister David Cameron on Wednesday at the start of a 24-hour visit to Indonesia aimed at boosting trade and investment.

"Garuda is buying 11 units of the A330-300 that will be delivered in a timeframe between 2013 and 2017," said one source close to the deal, asking not to be identified.

The new jets would increase the number of long-haul A330s already delivered to Garuda or on order from the airline by two thirds and would be powered by UK-supplied Rolls-Royce engines.

None of the companies involved agreed to comment.

The A330-300 sells for USD$231 million at list prices, but airlines typically pay less than the official price.

(Reuters)

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Garuda Orders 11 Airbus A330-300s

Indonesia's flag carrier Garuda signed a deal for 11 Airbus A330-300 passenger jets during a visit by British Prime Minister David Cameron.

The purchase of the A330s, worth about USD$2.5 billion and powered by Rolls-Royce engines, reflects the growing consumer demand that is attracting political leaders and financiers to court Southeast Asia's largest economy.

"This deal between Airbus and Garuda Indonesia Airlines is great news for the UK aerospace industry," Cameron told reporters after arriving in Jakarta on a 24-hour visit.

The new Airbus jets will increase by two-thirds the number of long-haul A330s already delivered to Garuda or on order from the airline.

Garuda's main domestic rival Lion Air in February signed a record USD$22 billion deal for planes from Boeing. That deal was first announced during a visit to Jakarta by US President Barack Obama.

Leaders from China and France also visited last year together with large delegations of executives sniffing for investment opportunities, especially to overhaul Indonesia's dilapidated infrastructure.

Indonesia is seeing a rapidly expanding aviation sector as a growing middle class, and business executives, opt to travel by air across an archipelago of 17,000 islands. Many islands lack good roads or railways, while ship connections are sporadic and slow, and deadly transport accidents are common.

Many airlines use old propeller planes to navigate remote and mountainous eastern provinces such as Papua, where a Garuda plane skidded off the runway on Wednesday. Garuda was removed from a European Union blacklist of Indonesian carriers in 2009.

Garuda's CEO Emirsyah Satar said he planned to use the new Airbus planes to expand in Asia-Pacific, including to China, South Korea and Australia.

Southeast Asian carriers have ordered USD$47 billion worth of aircraft for the coming decade.

(Reuters)