Aviation Week & Space Technology - 3 November 2014

Edited by Lee Ann Tegtmeier Chicago

RAYMOND TAN

Head of Engineering • Tiger Air

MRO providers perform specific maintenance

work, which is usually labor-intensive. To reduce

costs, airlines often outsourced heavy manpow-

er requirements to lower labor-cost countries.

However, outsourcing is beginning to move up

the skill ladder. It no longer involves just heavy

maintenance work, but the entire spectrum of engineering

and maintenance tasks. The emergence of smaller low-cost

carriers (LCC) is one trend driving such outsourcing.

Tomorrow’s MRO providers will be faced with having to of-

fer new value-added services. Airlines will ask, what else can

you do for us? Some MROs are already providing services such

as engineering repair in conjunction with maintenance. There

are other services that MROs can perform to add value. For

example, warranty administration—helping airlines to make

warranty claims—would be little additional work, but would

be a good value, especially for small LCCs. Ofering some level

of rotable repair management would also make sense. The

MROs receive the airlines’ LRUs and return the unservice-

able ones—so why not do limited repair management and hold

units for future aircraft coming in? Long-term maintenance

planning services could be another opportunity.

Increasingly, MROs are being asked to move up the skills

ladder. Line maintenance services, although not really a

skill-level increase compared with heavy maintenance, can

be paired with services that require higher skill levels. For

example, maintenance control, defect analysis, planning and

the full spectrum of fleet technical management services. Add

value and you become valuable, too. c

MRO Asia

Thought Leaders

MRO Edition MRO ASIA

MRO4 AVIATION WEEK & SPACE TECHNOLOGY MRO EDITION NOVEMBER 3/10, 2014 AviationWeek.com/mro

RICHARD BUDIHADIANTO

President and CEO • GMF AeroAsia

Chairman • Indonesia Aircraft Maintenance Services

Association (IAMSA)

The Asia-Pacific MRO sector is geared to achieve

maximum growth targets as more aircraft op-

erators outsource their MRO requirements. The

Indonesian MRO sector is ripe to benefit from

such shifts within the region, as the country

enjoys one of the lowest labor costs, along with

increased investment in technology and infrastructure. The

major challenges for industry stakeholders will be ensuring

that we grow at a controlled and sustainable pace, achieving

value-added solutions and faster turnaround times.

Indonesian carriers will spend $915 million on MRO work

this year. This figure is expected to more than double to $2

billion by 2023. Indonesian MRO companies now absorb less

than 30% of the country’s maintenance work, with 70% out-

sourced to other companies in the region. IAMSA and the

government plan to double MRO capabilities over the next

five years to absorb up to 60% of local aircraft maintenance

work. To do this, an additional 2,000 technicians and engi-

neers will be needed, as well as an aerospace park.

One of the most important issues facing Indonesia’s MRO

industry is the upcoming shortage of MRO specialists, which

will afect the development of aviation here. Securing the

necessary skilled human resources—a problem the entire

industry should address in concert—is imperative.

I look forward to the continued strong alliance between

the Indonesian government and the aviation industry. Jointly

we can further develop our MRO industry to new heights of

productivity, grow our skilled workforce, and gain interna-

tional recognition as a major MRO hub. c

KAZ HIYOSHI

Senior Vice President • Japan Air Commuter

The Asian aviation aftermarket is still growing,

and there are many MROs across the region.

This means airlines have lots of suitable MRO

candidates from which to choose. But they also

need to determine what maintenance should

be conducted in-house and what to outsource,

based on their business model.

Meanwhile, passenger expectations for on-time aircraft

performance increase steadily. In Japan, every high-speed

“Shinkansen” bullet train operates within 15 seconds of

schedule. Aircraft operations are also expected to perform

at the same level, and delays cause a financial burden.

To maintain reliable airline operations, suitable levels of

spare parts are necessary. The Asian region has a geographi-

cal disadvantage, as it is relatively distant from OEMs. Some

areas have OEM warehouses, but their stocks are generally

limited and are not quite adequate. Asian airlines have to

make their own logistics arrangements for spares in these

circumstances.

Choosing the optimal MRO and making appropriate lo-

gistics decisions are critical factors for Asian operators. c

Aviation Week asked these aftermarket leaders in Asia-Pacific to share their insights

on the business of MRO in the region—in advance of MRO Asia in Singapore.

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