Expanding Mandala

Expanding Mandala
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Indonesia's Mandala Air to buy 18 Airbus planes for $1.6 billion

 Indonesian airline PT Mandala Airlines plans to buy 18 Airbus A320 planes worth $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 medium-haul 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 PT Saratoga Investama Sedaya, which holds a 51 per cent 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 per cent share in a market dominated by Lion Air, which recently made a record $24 billion purchase of 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.


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