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ational flag carrier Garuda Indonesia signed a loan agreement with Kuwait-based aviation lease and finance company Alafco on Monday to finance new aircraft that will help strengthen the airline's international network.

The agreement was signed by Garuda president director and CEO Emirsyah Satar and Alafco's chairman, Ahmad A. Alzabin, in Cengkareng, Banten.

Alafco will finance two Boeing 777-300 Extended Range (ER) aircraft worth US$630 million for delivery in June and July.

The two B777-300ERs will be the first in Garuda's fleet.

'The two aircraft are part of 10 B777-300ERs that were ordered from Boeing, four of which will be delivered this year. The first two will serve Jakarta'Jeddah [Saudi Arabia] in July, and the next two will serve Sydney [Australia]'Jakarta-London [the UK] in the fourth quarter of this year,' Emirsyah said in a statement sent to The Jakarta Post, adding that the new planes would replace the carrier's aging fleet of B747-400s.

The Kuwaiti firm will finance the wide-body planes through a sale and lease-back scheme.

From the operations point of view, the new fuel-efficient and state-of-the-art aircraft would provide more inflight comfort to passengers and allow Garuda to maintain more efficient operations, he said.

Each B777-300ER can carry more than 300 passengers and offers first-class service.

Emirsyah said that this was an important milestone for Garuda Indonesia since this was the first time the publicly listed firm had entered a new partnership in accordance with sharia principles.

Alzabin said that Alafco was very proud to have Garuda as a new client.

He said the airline's management and board had been doing a remarkable job in turning the airline around and making it the pride of Indonesia.

'We are confident that the airline will continue to reach new heights in the coming years because Indonesia is a country where the aviation industry is growing rapidly on the back of a strong economy that is forecast to grow at an average rate of 6 to 7 percent annually until 2017 and be among the top six global economies by 2030,'
Alzabin said.

He added that the B777-300ER was the best aircraft in its class today and would provide Garuda and its customers with years of reliable service and comfort.

He expected to enter into more transactions with Garuda and support its future growth plans.

The airline will take delivery of 24 new aircraft at a cost of $1.57 billion throughout 2013 to support expansion of its domestic and international flight service.

This year's deliveries comprise the four B777-300s, 10 B737-800 Next Generation (NG) aircraft, two Airbus 330-320s, one A330-300 and seven Bombardier CRJ1000 NextGen aircraft.

Apart from London's Gatwick Airport, Garuda wants to expand its international service from Jakarta to Brisbane, Australia and Auckland, New Zealand.

The airline expects to fly each of the routes four times a week by the fourth quarter of 2013, increasing to seven times a week in the coming years.

Garuda currently operates 106 aircraft with an average age of 6.23 years, serving 34 domestic and 19 international destinations in Southeast Asia, the Middle East, North Asia, Australia and Europe.

To expand its international routes, the full-service carrier has signed code-share agreements with 11 international airline partners serving 35 international destinations.