Indonesia's low-cost carrier Mandala Airlines plans to purchase 18 Airbus single-aisle A320 aircraft worth $1.6bn by 2014 to meet increasing demand for middle class travel in South East Asia.
Mandala operates domestic routes and partners with minority shareholder Singapore's Tiger Airways for international flights.
The carrier, which currently owns seven A320s, will use an existing Tiger option to acquire the Airbus medium-haul jetliners.
The latest deal is a turnaround for Mandala, which repositioned itself as a budget airline after a year-long grounding in 2011 due to debt problems.
Mandala Airlines resumed operations in April 2012 following an injection of capital by Tiger Airways and investment firm Saratoga Investmenta Sedaya, which currently own 33.3% and 51% stake, respectively.
Saratoga Investama Sedaya chief Sandiaga Uno said that the company plans to serve two million passengers this year.
The addition of the new aircraft will increase the airline's fleet to 25 airliners by the end of 2014, according to Uno.
Mandala Airlines is seeking to capture 20% share in a market dominated by Lion Air, Uno added.
Saratoga Investama is planning to come up with an initial public offering (IPO) in the second quarter of this year to raise funds to co-inves with its private equity affiliate Saratoga Capital.
Featuring an optimised wing that is 20% more efficient compared with previous designs, the A320 can accommodate 150 passengers in a two-class cabin or up to 180 in a high-density layout for low-cost and charter flights, according to Airbus.
Mandala Airlines is headquartered in Jakarta, Indonesia, and its fleet of Airbus A320 aircraft fly primarily within the more populous areas of Java and Sumatra, providing domestic and regional international connections of no more than five hours.
Image: Mandala Airlines will use an existing Tiger option to acquire the Airbus medium-haul jetliners. Photo: courtesy of Airbus SAS.