Indonesia's Cardig buys ailing Mandala Airlines

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Indonesian transport conglomerate Cardig International has bought troubled Indonesian carrier Mandala Airlines in a deal worth around 300 billion rupiah ($34 million).

“Today the airline has 14 aircraft, but only five are flying,” says Mandala. Two are Boeing 737-400s and three 737-200s, while the grounded aircraft are all -200s.

Mandala’s operations director T Basuki says some of the grounded 737-200s are being used for spare parts, but others are being returned to service. Two parked -200s are returning to service later this month after undergoing C checks and three are returning to service in May, adds Basuki, who says Mandala currently operates to around 17 destinations in Indonesia.

The airline is also looking to get newer aircraft and is considering Airbus A320s and 737-800s, and “this year Mandala wants at least two to four”, says Basuki.

Cardig International bought Mandala from Indonesian military-linked Yasasan Dharma Putra Kostrad, which reportedly owned 90% of the airline, and the remaining 10% from other organisations.

Cardig International has meanwhile been in talks to sell a stake in Mandala to US investment firm Indigo Partners, but it remains unclear if the two have reached an agreement.

A senior official at Cardig International in Jakarta says that Indigo is “one of the potential partners” Cardig International has been talking to.

Indigo Partners is a US investment firm that former America West Airlines chief Bill Franke and aviation entrepreneur David Bonderman founded in 2002. Bonderman is chairman of European low-cost carrier Ryanair.

Cardig International owns a small cargo airline in Indonesia, Cardig Air, which flies two 737-200Fs. It also has aviation-related businesses in ground handling (Jasa Angkasa Semesta Airport Services), catering (JAS Catering), aircraft line maintenance (JAS Engineering), freight forwarding (Cardig Express), warehousing and logistics (Go Trans Logistics), and express courier services (UPS Cardig).