Linking Cities with 25 new A320neo

PT Garuda Indonesia (GIAA)’s low-cost unit Citilink ordered 25 Airbus SAS A320neo aircraft, worth $2.4 billion at list prices, as the carrier expands its fleet amid rising travel demand in Asia’s third-most populous nation.

The contract, signed in December, is the first direct purchase by Citilink from Airbus, the planemaker said in a statement today. The 2012 average list price of an A320neo is $96.7 million, according to Airbus website. Carriers usually get discounts from catalog prices.

Rival PT Lion Mentari Airlines, which ordered 230 Boeing Co. planes last year, is also considering the purchase of additional aircraft as air travel in the region is expected to grow more than 6.4 percent annually through 2031. Airbus has generally lagged behind Boeing in Indonesia where economic growth is spurring air travel demand.

Shares of Garuda were unchanged at 640 rupiah at close of trading in Jakarta. The Jakarta Composite index advanced 1.8 percent. The stock gained 39 percent last year.

Garuda ordered 25 A320 aircraft from Toulouse, France-based Airbus in 2011 to support Citilink’s growth. The contract included 10 orders for the A320neo, a revamped version of Airbus’s single-aisle plane.

Airbus is also looking to sell A380 superjumbos to Garuda. The airline said Nov. 21 it had received proposals from Airbus as well as from Boeing for its 747-8 Intercontinental. President Director Emirsyah Satar had said the review of proposals was still at an early stage.

Citilink has 14 A320s and seven Boeing 737s in its fleet, according to the carrier’s website.

To contact the reporter on this story: Vipin V. Nair in Mumbai at [email protected]

To contact the editor responsible for this story: Anand Krishnamoorthy at [email protected]

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