BY Itrat Bashir

Garuda Indonesia, Indonesia’s national carrier, has signed agreements with Airbus and Rolls-Royce for a £4 billion deal to upgrade the airline’s 14 A330s to the newer A330neo.

The deal was signed on the first day of a two-day visit to the UK by Indonesian President Jokowi, who met Prime Minister David Cameron on Tuesday 19th April to discuss the strengthening of economic and security ties between the two nations. Through this agreement, the UK manufacturing received a boost worth nearly £1 billion.

“The deal will secure jobs at Airbus facilities in Filton, near Bristol, and Broughton, in North Wales, as well as the extended supply chain across the UK. Rolls-Royce has signed an agreement for the provision and aftercare of Rolls-Royce engines,” said a government’s spokesperson.

In a statement, Prime Minister David Cameron said that this deal underlines the increasing importance of our ties with Indonesia, a fast growing economy and set to become the seventh largest in the world by 2030. “We are the fifth biggest investor in Indonesia and our relationship has more untapped potential. We want to encourage more British businesses to seize on these opportunities and we will continue to support them by banging the drum for British skills and expertise.

Airbus Chief Operating Officer Tom Williams said that they are delighted to welcome Garuda Indonesia as a new customer for the A330neo. He also said the A330neo will bring a range of benefits from unbeatable operating economics, including significant reductions in fuel consumption, lower maintenan

David Cameron welcomes President Jokowi of Indonesia to Downing Street
Prime Minister David Cameron welcomes President Jokowi of Indonesia to Downing Street

ce costs and extended range capability. “The aircraft will have Airbus’ all new Airspace cabin, which will ensure the A330 continues to be a benchmark for passengers and airlines alike,” he added.

Rolls-Royce President of Civil Aerospace Eric Schulz also welcomed the agreement by saying that Indonesia has great economic prospects and they are committed to supporting its future growth in air travel. “This year marks the 20th anniversary since we first provided Trent engines to Garuda Indonesia and we are proud to power this latest expansion to their fleet with the very latest member of our Trent engine family. In creating this family, we have benefitted from UK investment in innovation across materials, aerodynamics, noise, control systems and manufacturing technologies,” he added.

Meanwhile, during the meeting the two leaders also held discussions around an ambitious EU-Indonesia free trade agreement. “The Comprehensive Economic Partnership Agreement holds huge potential for both our countries, making it easier and cheaper for business to invest and trade. Experts estimate a deal could save £50 to £70 million per year for UK exporters,” the spokesperson added.

The Prime Minister had visited Indonesia twice over the past four years, most recently in July 2015. Last year bilateral trade between Indonesia and the UK increased by nearly four percent to £1.62 billion, but both governments agree there is vast potential to build on this. The Indonesian retail market nearly doubled in size between 2008 and 2014 and will be worth almost US $550 million by 2016. Marks and Spencer, Debenhams and Mothercare are already active in the country and the government wants to help others to join them, taking advantage of the support available from UK Trade and Investment and others.