In a bid to capture middle class travel in Southeast Asia, Indonesian airline PT Mandala Airlines is set to spend $1.6 billion to buy 18 Airbus A320 planes by 2014.
According to Sandiaga Uno, chief of investment firm PT Saratoga Investment Sedaya, a major shareholder, the target is to get more two million passengers this year by adding more fleet. Mandala presently operates seven A320s, and according to Uno, by the end of 2014 they will have 25 planes.
In line with its expansion plans, Mandala is aiming for a 20 percent share in the airline market presently being dominated by Lion Air.
An initial public offering is being planned by Saratoga Investama in the second quarter to raise capital for a co-investment with Saratoga Capital, its private equity affiliate.
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.
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