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ational flag carrier PT Garuda Indonesia signed a memorandum of understanding (MoU) with Singapore-based investment company Gallant Venture on Tuesday to develop an airport and maintenance facility in Bintan, Riau Islands.

Garuda president director Emirsyah Satar and Gallant Venture CEO Eugene Park inked the deal during the 2014 Singapore Airshow in Singapore.

'€œThis new operation will help strengthen Garuda'€™s network development, with potential to connect the eastern and western part of Indonesia as well as becoming the meeting point for international flights to Europe and the Far East,'€ Emirsyah said.

Park said that the first phase of development would include the development of one runway and one terminal to accommodate initial traffic, which is targeted to start operations in 2016.

He said that the investment value for the first phase of development had reached S$300 million (US$236.6 million)

The airport terminal will be connected to a ferry terminal that will serve routes from Singapore and Batam to Bintan Airport.

Gallant Venture, through its subsidiary company, currently operates ferry services between Bintan and Singapore'€™s Tanah Merah Ferry Terminal.

'€œA couple of years ago we dreamed of building a small airport to cater to the growing traffic to Bintan resorts,'€ Park said.

'€œOur airport plan, however, has grown into integrated facilities for hub airline operations, a logistics center, aerospace, industrial park and other aviation facilities,'€ he continued.

He said that the company'€™s ferry connections to neighboring islands, including Singapore, would be enhanced to ensure speedy services and quicker turnaround.

'€œAt the same time, Garuda Indonesia'€™s operations and the aerospace industrial park in Bintan will boost the economy here and create substantial job opportunities as well as upgrade the skills and the standard of living of people in the Riau Islands,'€ he continued.

Park said that the initial development would consist of 250 hectares for the airport and an additional 250 hectares for phase one of the aviation park.

He added that the firm had also earmarked 800 hectares for the expansion of both these aviation-related facilities.

The Bintan Aerospace Industry Park will include Maintenance, Repair, and Overhaul (MRO) of aircraft and components; manufacturing and assembly of aircraft engines and components; aviation training and academy and research and development.

Separately, Riau Islands Governor Muhammad Sani said that the average number of tourists that came to Bintan had reached 800,000 per year.

'€œAll foreign tourists can only reach Bintan with ferries through Batam and Singapore. We hope that with the establishment of the new international airport, we will increase the number of tourists by up to 15 percent,'€ Sani told The Jakarta Post.

Bintan will become Garuda'€™s sixth hub in Indonesia after Jakarta, Denpasar in Bali, Makassar in South Sulawesi, Balikpapan in East Kalimantan and Medan in North Sumatra.

The airline had been looking to find a new maintenance center to overcome the overcrowding Soekarno-Hatta International Airport.

Garuda plans to bring in 27 new aircraft this year, comprising two Boeing 777-300s, four Airbus 330s, 12 Boeing 737-800s, three CRJ and six ATR 72-600s. They will take delivery of the aircraft in the second half of this year.

Emirsyah said that the airline was still finalizing plans to order up to 250 planes, to effectively double its fleet to 350-400 aircraft by 2025.