Malaysia Airlines on Tuesday said it will buy 36 new ATR turboprop aircraft for more than $900 million as it looks to boost profits by further expanding its regional and domestic networks.
Of the 36 ATR 72-600 planes, the carrier said 20 will go to low-cost subsidiary Firefly, which is fast expanding its lucrative routes, while 16 are for MASwings, another low-cost carrier that flies to Sarawak and Sabah on Borneo island.
The three-billion-ringgit purchase comes after the struggling flag carrier in November said it had swung back to a profit, ending six straight quarterly losses after slashing unprofitable routes to cut costs.
Malaysia Airlines group CEO Ahmad Jauhari Yahya said Firefly is expected to rapidly expand within the next five years thanks to growing demand in Asia.
"The additional aircraft will be utilised to continue growing Firefly's network and providing customers with more travel options," said Ahmad Jauhari, who signed the deal with Filippo Bagnato, chief executive of French-Italian firm ATR.
The aircraft are slated for delivery from the end of the second quarter of 2013.
Ahmad Jauhari said that the expansion of the Firefly route network would focus on Malaysia, Indonesia, Thailand and Singapore.
Launched in April 2007, Firefly provides connections to various points within Malaysia, Thailand, Singapore and Indonesia's Sumatra. It currently has 12 ATR-72-500 aircraft while MASwings operates 10 similar aircraft.
Mohamad Nawawi Awang, CEO of MASwings, said the new aircraft would provide more flights to airports in the Malaysian part of Borneo.
Asian airlines are ramping up purchases of aircraft as they look to tap growing demand for travel among the region's expanding middle class.
Earlier this month Malaysia's AirAsia, the region's top budget carrier, ordered 100 Airbus A320 aircraft with a catalogue value of $9.3 billion, including 64 future A320 fuel-efficient Neo models as it looks to expand services.
Ignatius Ong, Firefly's CEO said the additions to its fleet were more fuel efficient and will have the latest cockpit technology similar to Airbus's A380 superjumbo.
"The turboprop is also reputed to be one of the most fuel efficient aircraft in existence, hence resulting in lower carbon emissions," said the CEO.
The chief designer of the aircraft cabin is a top Italian designer whose work is seen in many luxury supercars such as Lamborghini and Maserati, Firefly said.