Airbus Military has signed an agreement with PT Dirgantara Indonesia (PT DI) to jointly manufacture and launch an upgraded variant of the C212-400 medium transport aircraft.

The EASA and FAA FAR 25 certified aircraft, which will be named the NC212, will be equipped with new digital avionics and autopilot systems, and will also feature 28 passenger seats, three more than the existing commercial aircraft.

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The agreement forms part of a contract signed between the two companies in October 2011, and covers joint development, manufacturing, commercialisation and customer support for addressing the civilian, cargo and military light aircraft market in the next decade.

Airbus Military Commercial, Strategy and Industrial Relations, Asia senior vice president Ignacio Alonso said the agreement shows the company’s increased cooperation with Indonesia.

"We see a promising future for this very competitive NC212 in many countries worldwide," Alonso added.

PT DI president director Budi Santoso said: "This will result in strengthening the position of PT DI as a leading player in the region, exactly as we have set out to do in our strategic cooperation agreement with Airbus Military."

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The aircraft is scheduled to be manufactured at a soon-to-be established final assembly line in PT DI’s facilities in Bandung, West Java, Indonesia.

Both companies are setting up joint working teams in Bandung and Airbus Military personnel have been deployed on-site since October 2011.

The Indonesian Air Force has already ordered an initial batch of CN295 military transport aircraft from PT DI under a $325m deal in February 2012 as part of the original teaming agreement, to support its military, logistical, humanitarian and medical evacuation missions.

The companies are also establishing a service and delivery centre and a final assembly line in Indonesia along with a joint venture to market the C295 in the region.