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PT Garuda Indonesia will lease as many as 35 ATR 72-600 turboprop aircraft from Nordic Aviation Capital to modernise 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 US$840 million (RM2.73 billion), and deliveries of the aircraft will start next month.

ATR, as the Avions de Transport Regional joint venture of European Aeronautic, Defence & Space Co. and Finmeccanica SpA 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.

“This agreement highlights the strong commercial success of the ATR 72-600 in Asia,” ATR Chief Executive Officer Filippo Bagnato said in the statement. “We will continue investing to support and further develop this growing region.”

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

“Southeast Asia is definitely providing us with huge leasing potential,” Martin Moller, chairman of Billund, Denmark-based NAC, said. The company in June placed an order for 90 of the European turboprops, including the smaller ATR 42-600 model.

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. — Bloomberg

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