State-owned carrier Malaysia Airlines today said it will now acquire 20 turbo-propeller planes from European aircraft maker ATR to serve the expansion plans for its two new budget carriers.

Malaysia Airlines has also an option to buy an additional 15 ATR aircraft later on.

The national carrier said the deal was estimated at US$650 million including the options. Malaysia Airlines in June had said it will acquire 10 ATR aircraft with options for a further 10.

The ATR-72 500s aircraft - to be delivered from 2008 - will be used by low-cost operator Firefly and MASwings. Both are wholly-owned units of Malaysia Airlines.

Eddy Leong, chief executive officer of Firefly said the ATR-72 500 series was the right choice amid growth in the carrier's regional operations and would provide the highest standards of comfort.

Firefly, which currently flies out from northern Penang island will use the ATR-72 to expand its network, as the airline establishes its hubs in Kuala Lumpur (Subang) Johor Bahru and Kota Kinabalu.

With its new 68-seat planes, MASwings services the states of Sabah and Sarawak on Borneo island.