Aircraft maintenance company PT Garuda Maintenance Facility (GMF) AeroAsia is taking aggressive steps to expand its maintenance, repair and overhaul (MRO) business overseas while improving its in-house maintenance capacity in the country to cater to more airlines.

GMF’s newly appointed president director, Tazar Marta Kurniawan, said the subsidiary of national flag carrier Garuda Indonesia was currently finalizing its MRO business expansion plan in the Middle East.

To carry out such a plan, GMF is working with a local partner under a joint venture partnership in which the latter has to establish a hangar located in Dubai South, an economic zone in the United Arab Emirates. Once all required infrastructure construction is finalized, GMF will be responsible for operating the MRO facility, Tazar said.

“Hopefully by next month, everything will be finalized. The hangar has been completely constructed by our local partner. We plan to bring around 150 technicians there,” said Tazar recently, adding that the MRO facility in Dubai South could accommodate four narrow-body aircraft.

Over the last few years, GMF Aero Asia has been determined to strengthen its international presence in other countries and expand its in-house capacity amid a growing global aviation industry. The firm has set an ambitious target of becoming one of the top 10 MRO companies by revenue in the world.

A report by global management consulting firm Oliver Wyman stated that total global MRO spending was projected to rise to US$116 billion by 2029, up from $81.9 billion in 2019. Meanwhile, the fleet size would reach 37,175 worldwide by 2029 from 27,492 this year.

Global consulting firm ICF International said the global MRO market was expected to grow 4.6 percent per annum to $118 billion by 2027 and $140 billion in 2037, according to its data published by the International Air Transport Association (IATA).

In 2017, the Asia Pacific market share alone stood at 30 percent, larger than that of North America (27 percent) and Europe (26 percent). By 2037, Asia Pacific is projected to generate 38 percent of total MRO demand, ICF analysis showed.

Aside from its expansion in the Middle East, GMF AeroAsia is also preparing to develop its MRO network in Australia, where the firm will focus on line maintenance. It also plans to establish GMF Australia by partnering with a local firm. However, the Australian expansion plan was still in the initial stage, Tazar said.

Other than in the Middle East and Australia, the publicly listed company is also eyeing expansions in African countries.

“Being present in other countries means that we get closer to our customers since we cannot bring all their aircraft in-house [to Indonesia] as it is impossible for a narrow-body plane to fly more than four hours,” said Tazar.

While GMF is boosting its international expansion, the firm is going full steam to increase its in-house capacity in airframe maintenance, engine maintenance, component maintenance and line maintenance services. Tazar said it was essential to increase maintenance capacity if GMF wanted to optimize its revenue and profitability.

In airframe maintenance, for example, the utilization of GMF’s hangars in Indonesia for airframe maintenance has reached 100 percent. This means they cannot absorb more aircraft despite the high demand for airframe
maintenance.

"To increase our airframe maintenance capacity we have carried out expansion strategies including by partnering with Batam Aero Technic [BAT] to develop hangars in Batam,” he said.

Under the joint venture, GMF AeroAsia and Lion Air Group’s BAT are to build eight hangars at Hang Nadim airport capable of accommodating 25 Boeing 737 and Airbus 320 aircraft, aiming to compete with Singapore.

Coordinating Economic Affairs Minister Darmin Nasution, who attended the facility’s groundbreaking last month, pledged the government’s support to the aviation industry. His office and the Transportation Ministry are in the very near future to announce policies aimed at boosting aviation industry competitiveness.

“The government wants the aviation industry to grow sustainably and become competitive,” Darmin said, adding that Garuda and Lion can propose that their MRO facilities in Batam be categorized as a special economic zone so that they are eligible for tax holiday incentives.

Currently. GMF’s 972,123-square-meter MRO facility at Soekarno-Hatta International Airport in Tangerang, Banten, has a total of four hangars that serve domestic and international customers, including Vietjet Airlines, Korean Air, AirAsia, Qatar Airways, Xiamen Airlines, Citilink Indonesia, Garuda Indonesia and Sriwijaya Air.

During the first six months of this year, GMF Aero Asia recorded $246.3 million in revenue, an increase of 10.3 percent from the same period last year.

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