| Bigger share of global MRO
THE EDGE DAILY - Jan 04, 2005
www.theedgedaily.com - By Tong Yee Siong SME Aviation Sdn Bhd can play a major role in helping Malaysia capture a larger share of the global business in third party maintenance, repair and overhaul (MRO) for commercial planes, its chairman Lt Gen (R) Datuk Seri Mohd Yunus Mohd Tasi says.
He said a total of US$18 billion (RM68.4 billion) was spent on commercial aircraft maintenance last year — of which one-third was for third party MRO — and this figure was set to grow significantly due to increasing air traffic.
“Currently, Malaysia is getting less than 1% of that (US$18 billion). If we can get 5% of that, it will be very substantial to us.
“The cake is getting bigger and as a new player, we are looking at getting new customers,” Mohd Yunus told reporters after SME Aviation launched what it claimed to be the world’s first independent budget MRO at the Sultan Abdul Aziz Shah Airport in Subang on Jan 3.
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(From left) Mohd Yunus, Deputy Minister
of Transport Datuk Douglas Uggah Embas, Pembinaan Jaya Bumi
Sarawak Industries Sdn Bhd president Tan Sri Ahmad Johan and SME
Aviation CEO Ahmad Fuzli Fuad at the MRO launch |
Unlike other local MROs that are owned directly by airline operators, SME Aviation is controlled by PJS Industries Sdn Bhd, which owns 90% of National Aerospace and Defence Industries Sdn Bhd (Nadi).
Nadi, in turn, is the holding company of Airod Sdn Bhd, which holds major aircraft maintenance contracts with the Royal Malaysian Air Force.
Mohd Yunus said SME Aviation, which would operate from Airod’s hangar with the latter’s engineering support team for the time being, would base its business model on that of low-cost carriers (LCCs).
“We are focussing on pure engineering works. Operational cost will be kept to a minimum with low risk and no frills.
“The maintenance cost now is US$30 to US$35 per man hour according to the market rate and we expect our rate to be substantially lower,” he said.
SME Aviation was targeting to perform maintenance works worth RM10 million to RM15 million for 18 aircraft within the next 12 months, he said, adding that it is ready to collaborate with other MRO firms here to tap into their core competency.
He said the company could benefit from the “phenomenal” growth of LCCs.
“The traditional airlines are also thinking of outsourcing their maintenance services. If they do, we will be in the position to undertake the works,” he said.
He said Subang Airport would be the MRO centre for Malaysia and SME Aviation planned to build a hangar of its own at Terminal One in the future.
At the launching ceremony on Jan 3, SME Aviation also signed a memorandum of understanding (MoU) with the Indonesian operation of US-based aircraft leasing firm Aventura Aviation.
The MoU will see Aventura sending five of its planes from Indonesia to SME Aviation for maintenance this year. SME Aviation will also undertake the passenger-to-freighter conversion of six Aventura’s Boeing 727 aircraft.
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