Bloomberg News

Garuda Indonesia Gains to Record on Jets Order: Jakarta Mover

February 02, 2012

Feb. 2 (Bloomberg) -- PT Garuda Indonesia, the nation’s biggest carrier, rose to record in Jakarta after it said it is in final talks with Bombardier Inc. on an order for as many as 25 small planes.

Garuda advanced 8.6 percent to 630 rupiah as of 2:51 p.m., set for the highest close since its trading debut on Feb. 11, 2011. The Jakarta Composite index rose 1.1 percent.

Garuda, which raised $530 million in an initial public offering last year, expects to announce a deal at the Singapore Air Show this month, Chief Financial Officer Elisa Lumbantoruan said today by phone. Garuda plans to buy the planes by 2015 with delivery starting in October or November this year, he said.

Demand for air travel may rise in Southeast Asia’s biggest economy, where domestic consumption accounts for about 56 percent of gross domestic product. Indonesia may spend at least 3 trillion rupiah ($331 million) on airports in 2012, Herry Bakti Gumay, director general of aviation at the transport ministry, said Dec. 7.

“Garuda’s shares gained today on its plan to expand its fleet with smaller planes, amid the expectation more people will fly with Garuda,” Maxi Liesyaputra, an analyst at PT BNI Securities in Jakarta, said by phone today. “With smaller jets, it will mean fewer passengers at a higher yield.”

Jakarta-based Garuda intends to use the smaller planes to access more domestic routes among Indonesia’s 17,000 islands that span 5,150 kilometers (3,200 miles), the distance from Florida to Alaska. Garuda wants to bypass larger airports in Jakarta, Surabaya and Bali’s Denpasar by offering direct flights among smaller regional airports, Lumbantoruan said March 31.

“We want to be able to land on shorter runways,” Lumbantoruan said at the time. “We want to fly tourists to regions around Bali.”

The efficiency and the economy of the Bombardier plane are attractive, Lumbantoruan said today.

Garuda expects sales to rise 21 percent this year from last year’s unaudited total of 27.1 trillion rupiah, Chief Executive Officer Emirsyah Satar told reporters in Jakarta Jan. 12.

--Editors: Greg Ahlstrand, Matthew Oakley

To contact the reporter on this story: Femi Adi in Jakarta at fadi1@bloomberg.net

To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberng.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus