Malaysian Airline signs MoU for $981 million ATR turboprop order

KUALA LUMPUR Tue Dec 18, 2012 5:37am EST

Visitors and staff chat at the ATR pavilion at the Singapore Airshow in Singapore February 16, 2012. REUTERS/Tim Chong

Visitors and staff chat at the ATR pavilion at the Singapore Airshow in Singapore February 16, 2012.

Credit: Reuters/Tim Chong

KUALA LUMPUR (Reuters) - Malaysian Airlines System Bhd (MAS) (MASM.KL), the country's national carrier, said on Tuesday it signed a memorandum of understanding with French-Italian aircraft maker ATR to buy 36 turboprop airplanes for 3 billion ringgit ($981 million).

The agreement to purchase the ATR 72-600 aircraft comes just days after AirAsia Bhd (AIRA.KL) announced a $9.4 billion order for 100 Airbus jets to expand its fleet size before the Southeast Asian open-sky policy comes into effect in 2015.

MAS has been struggling to remain competitive due to an ageing fleet, rising fuel costs and competition from low-cost carriers such as AirAsia, Asia's biggest budget airline.

Of the 36 planes, MAS said its wholly owned carrier Firefly will take 20, while MASwings, a MAS unit that flies rural routes in Sabah and Sarawak states, will take the rest.

Firefly currently operates 12 ATR 72-500s, and MASwings operates 10 similar aircraft.

The new ATR 72-600s are expected to arrive starting the end of the second half of 2013, according to Firefly in a press statement.

(Reporting by Yantoultra Ngui; Editing by Ryan Woo)

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