Indonesian flag-carrier Garuda is developing a new aviation hub on Bintan Island near Singapore to strengthen its domestic and international network.
Garuda entered into a partnership with Singapore-based firm Gallant Venture, which will invest Sg$300 million ($A265.62 million) in the project.
The firms signed an agreement at the Singapore Airshow to develop Bintan as Garuda's new hub with a dedicated airport for the carrier and its subsidiary as well as a centre for aircraft maintenance.
Garuda will also promote Bintan, an island with white-sand beaches and resorts less than an hour by boat from Singapore, as a tourism destination.
"They have started with a runway that is 3000 metres that is quite long and can land wide-body (aircraft)," Garuda Indonesia chief executive Emirsyah Satar told a media briefing.
"This new operation out of Bintan will help strengthen Garuda's network development, with a potential to connect East Indonesia with West Indonesia and become the meeting point for our international flights to Europe and the Far East."
The airport is scheduled to start operating in 2016.
Indonesian carriers are setting up aviation hubs across the vast archipelago because of congestion at the main airport in Jakarta.
Bintan will be Garuda's fifth hub in Indonesia after Jakarta, Makassar in Sulawesi, Denpasar in Bali and Medan in Sumatra.
The Bintan aviation hub will include a 177-hectare aerospace industrial park housing a maintenance, repair and overhaul facility.
The park will also have a facility to manufacture and assemble aircraft engines and components and an aviation academy.
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