Airod, Malaysia’s leading Maintenance, Repair and Overhaul (MRO) company, is eyeing greater collaboration with Malaysian Aerospace Engineering (MAE) in line with its aspiration to be the world’s largest airframe MRO. Malaysian Aerospace Engineering (MAE) is a subsidiary of Malaysia Airlines (MAS).
Tan Sri Ahmad Johan, Executive chairman of National Aerospace & Defence Industries Sdn Bhd (NADI), the holding company of Airod, said worldwide MRO players are consolidating to maximise capacity utilisation as only large players will survive.
He emphasised that the combined resources of both MAE and Airod, will position the combined entity into high growth markets as China and India and propel Malaysia as a leading MRO player.
"By combining the strength of MAE’s presence in the MRO market in India as well as Airod’s recent footprint in China, it will position Malaysia as a formidable player in the large MRO market," Ahmad said in an interview with Bernama.
The Asia Pacific, China and India combined, according to recent industry reports, will be a MRO market larger than Europe and North America in 2019. It will have a market size of US$17.1 billion.
MAE is the third largest global MRO player in terms of total airframe man-hours. It has forged a joint venture with GMR Hyderabad International Airport Ltd, a subsidiary of GMR Infrastructure Ltd from India, to set up a MRO facility at Hyderabad, India, which is expected to be launched soon.
"We are focusing now on our plans to move aggressively into commercial MRO and China is on our agenda," he said. Ahmad is confident that Airod can compete effectively in the booming MRO market in China.
Currently, China’s major MRO is on the eastern part of the country with ST Aerospace, a Singapore-based aviation company, having two MRO's in Shanghai and Guangzhou.
Airod's move into China’s western part, he said, will provide an opportunity for the company to tap into the high growth area for MRO jobs.
"The new airport, set to start operations in January 2013, will be the fourth-largest aviation hub in China and attract a large number of budget and smaller domestic airlines," he said.
Ahmad also said the government of Yunnan has given the concession for Airod to set up third party MRO facilities at the Kunming International Airport.
He said the development is in stages to provide MRO services for narrow body and wide-bodied aircraft as well as cargo conversion and upgrades at the Kunming International Airport by end 2012.
Kunming, he said is a new business hub and destination for investors, due to its strategic location and very competitive cost structure.
"We are targeting RM1 billion revenue from the MRO facility in Kunming International Airport by year 2015," he added.
Ahmad said Airod’s investment in China which will start at US$200 million initially, will be a major step for it to diversify into commercial MRO, especially as military jobs are declining with less maintenance intensive and newer military aircraft in the market.
"Declining global military spending compels Airod to re-examine the MRO business model and initiate the Airod and MAS collaboration to share resources and grow the commercial MRO business," he added.
MAS and Airod signed the general terms agreement (GTA) on July 20, 2011 to optimise use of skilled manpower and resources.
Ahmad said Airod is also embarking on a smart partnership programme with the Royal Malaysian Airforce (RMAF). The partnership is to upgrade the skills of the RMAF's human resource through training with Airod and also give retired air force personnel an opportunity to work with it.
"This enable us to scale up the global MRO market in meeting the human capital needed for it," he said. -- Bernama
Tan Sri Ahmad Johan, Executive chairman of National Aerospace & Defence Industries Sdn Bhd (NADI), the holding company of Airod, said worldwide MRO players are consolidating to maximise capacity utilisation as only large players will survive.
He emphasised that the combined resources of both MAE and Airod, will position the combined entity into high growth markets as China and India and propel Malaysia as a leading MRO player.
"By combining the strength of MAE’s presence in the MRO market in India as well as Airod’s recent footprint in China, it will position Malaysia as a formidable player in the large MRO market," Ahmad said in an interview with Bernama.
The Asia Pacific, China and India combined, according to recent industry reports, will be a MRO market larger than Europe and North America in 2019. It will have a market size of US$17.1 billion.
MAE is the third largest global MRO player in terms of total airframe man-hours. It has forged a joint venture with GMR Hyderabad International Airport Ltd, a subsidiary of GMR Infrastructure Ltd from India, to set up a MRO facility at Hyderabad, India, which is expected to be launched soon.
"We are focusing now on our plans to move aggressively into commercial MRO and China is on our agenda," he said. Ahmad is confident that Airod can compete effectively in the booming MRO market in China.
Currently, China’s major MRO is on the eastern part of the country with ST Aerospace, a Singapore-based aviation company, having two MRO's in Shanghai and Guangzhou.
Airod's move into China’s western part, he said, will provide an opportunity for the company to tap into the high growth area for MRO jobs.
"The new airport, set to start operations in January 2013, will be the fourth-largest aviation hub in China and attract a large number of budget and smaller domestic airlines," he said.
Ahmad also said the government of Yunnan has given the concession for Airod to set up third party MRO facilities at the Kunming International Airport.
He said the development is in stages to provide MRO services for narrow body and wide-bodied aircraft as well as cargo conversion and upgrades at the Kunming International Airport by end 2012.
Kunming, he said is a new business hub and destination for investors, due to its strategic location and very competitive cost structure.
"We are targeting RM1 billion revenue from the MRO facility in Kunming International Airport by year 2015," he added.
Ahmad said Airod’s investment in China which will start at US$200 million initially, will be a major step for it to diversify into commercial MRO, especially as military jobs are declining with less maintenance intensive and newer military aircraft in the market.
"Declining global military spending compels Airod to re-examine the MRO business model and initiate the Airod and MAS collaboration to share resources and grow the commercial MRO business," he added.
MAS and Airod signed the general terms agreement (GTA) on July 20, 2011 to optimise use of skilled manpower and resources.
Ahmad said Airod is also embarking on a smart partnership programme with the Royal Malaysian Airforce (RMAF). The partnership is to upgrade the skills of the RMAF's human resource through training with Airod and also give retired air force personnel an opportunity to work with it.
"This enable us to scale up the global MRO market in meeting the human capital needed for it," he said. -- Bernama
