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More lines in the sky

Akhyari Hananto
Akhyari Hananto
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More lines in the sky

Indonesia's flag carrier Garuda will sign a deal for 11 Airbus passenger jets on Wednesday, during a visit byPrime Minister David Cameron aimed at boosting trade and investment.

The purchase of the A330 jets, worth about $2.5 billion (1.5 billion pounds) and powered by UK supplied Rolls-Royce engines, reflects the growing consumer demand that is attracting political leaders and financiers to court Southeast Asia's largest economy.

"This deal between Airbus and Garuda Indonesia Airlines is great news for the UK aerospace industry," Cameron told reporters after arriving in Jakarta on a 24-hour visit.

Cameron's coalition government is trying to boost British manufacturing to reduce reliance on financial services and to limit exposure to the crisis-hit euro zone by doing more business with fast-growing emerging markets.

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Cameron, accompanied by about 35 executives on an Asian tour, has said he sees enormous potential in Indonesia, and the British delegation is expected to focus on possible deals in energy, construction, retail, pharmaceutical, defence and financial services sectors.

The new Airbus jets will increase by two-thirds the number of long-haul A330s already delivered to Garuda or on order from the airline. Its main domestic rival Lion Air in February signed a record $22 billion deal for planes from Boeing Co.

That deal was first announced during a visit to Jakarta by U.S. President Barack Obama. Leaders from China and France also visited last year together with large delegations of executives sniffing for investment opportunities, especially to overhaul Indonesia's dilapidated infrastructure.

Indonesia is seeing a rapidly expanding aviation sector as a growing middle class, and business executives, opt to travel by air across an archipelago of 17,000 islands. Many islands lack good roads or railways, while ship connections are sporadic and slow, and deadly transport accidents are common.

Many airlines use ageing propeller planes to navigate remote and mountainous eastern provinces such as Papua, where a Garuda plane skidded off the runway on Wednesday. Garuda was removed from a European Union blacklist on Indonesian carriers in 2009.

Garuda's CEO Emirsyah Satar said he planned to use the new Airbus planes to expand in Asia-Pacific, including to China, South Korea and Australia.

Southeast Asian carriers have ordered $47 billion worth of aircraft for the coming decade.

(Reporting by Olivia Rondonuwu and Mohammed Abbas; Writing by Neil Chatterjee; Editing by Michael Perry)

(Reuters)

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