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Garuda, Lion’s $100m aircraft facility in Batam to compete with Singapore

State-run flag carrier Garuda Indonesia’s aircraft maintenance unit, the Garuda Maintenance Facility, private airline giant Lion Air Group and  Batam Aero Technik announced a joint venture to build a maintenance repair and overhaul facility in Batam to compete with neighboring Singapore.

Fadli (The Jakarta Post)
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Batam
Thu, August 22, 2019

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Garuda, Lion’s $100m aircraft facility in Batam to compete with Singapore A Boeing 737-900ER is parked in a hangar in Batam city airport in Riau province, western Indonesian, on Nov. 21, 2014. (AFP/Romeo Gacad)

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tate-run flag carrier Garuda Indonesia’s aircraft maintenance unit, the Garuda Maintenance Facility, private airline giant Lion Air Group and  Batam Aero Technik announced a joint venture to build a maintenance repair and overhaul (MRO) facility in Batam to compete with neighboring Singapore.

The adult children of Indonesian migrant workers (TKI) in Malaysia would especially be employed to work in the facility, said Coordinating Economic Affairs Minister Darmin Nasution who inaugurated the facility construction in the Hang Nadim International Airport complex of Batam, Riau Islands, last week.

“Rusdi Kirana [Lion founder and Indonesian ambassador to Malaysia] will bring [adult] children of TKI in Malaysia who have spent dozens of years in Malaysia to be trained here, so they’re not lost from Indonesia. This is a high-tech industry so it’s not going to be a street workshop work. It’s an advanced workshop,” Darmin said in his remarks.

MRO facilities are crucial to support Indonesia’s progress in developing its aviation industry with the operational costs of airlines making up 60 percent of overall costs, according to Darmin.

“Garuda and Lion are only capable of handling 30 percent of aircraft maintenance; where do the other two-thirds [of the demand] go? To Singapore. Of course we don’t want this to drag on so it’s very important to cheerfully welcome this commitment that has been signed” between Garuda and Lion, the minister added.

Batam has proximity with Singapore, a hub for international flights and the location of the Original Equipment Manufacturer as a place to stock aircraft spare parts.

The Office of the Coordinating Economic Affairs Minister and the Transportation Ministry are in the very near future to announce policies aimed at boosting aviation industry competitiveness as the total number of aircraft in the Asia-Pacific region is predicted to reach 11,680 by 2025, making it the biggest MRO market in the world.

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