China's - Orient Aviation

SPECIAL REPORTMaintenance,Repair and OverhaulLCCs adding spiceto MROs’ cakeCompetition keen as budget carriers continue to growThe boom in low-cost carriersin the Asia-Pacific in recentyears has been music to theears of the maintenance,repair and overhaul (MRO)companies. But as the region’s start-upsmove from the early developmental stageto fully-fledged, sophisticated operations,there is a tendency for them to re-evaluatetheir MRO requirements.That may mean bringing line maintenancein house, or splitting component and airframecontracts, as they re-think the need – oftengreater at the time of launch – to dependon one all-round provider, according toDavid Stewart, principal at UK consultantsAeroStrategy. It also means MRO providersmust go with the flow.For example, when Tony Fernandesannounced AirAsia’s heavy maintenancework was to be brought back from Singaporeto Malaysia, he wasn’t striking a patrioticpose. The low-cost carrier (LCC) pioneerwas doing what he always does: watchingthe bottom line.Transferring heavy airframe maintenancefrom Singapore Technologies Aerospace (STAero) to new MRO operator, Sepang AircraftEngineering (SAE), will save significantsums.The airline’s B737s and A320s will onlyneed towing to SAE’s newly built hangar atKuala Lumpur International Airport, insteadof being flown to the Lion City. The switchis likely to get underway towards the end ofthe year when SAE, formed by Malaysianentrepreneur Syed Budriz Putra, is due toopen for business.Fernandes’ action is in keeping with theLCC business philosophy of saving moneywherever possible. That’s certainly the caseat ST Aero. It signed a contract for A320‘You have a pretty competitivemarketplace out there. What ittakes to win in airframe heavymaintenance is not what ittakes to win in components’David StewartPrincipalAeroStrategy>>>>>>>>>>>>>>>>>>>component support with AirAsia earlierthis year and says it is continuing B737maintenance as stipulated under earlieragreements.“Work for AirAsia remains and we willabide by whatever the customer wishes forthe maintenance of its fleet,” said ST Aeropresident, Tay Kok Khiang. “AirAsia is avalued customer. Whatever suits them bestis what they should try out.”As the world’s largest heavy maintenanceprovider with an extensive customer base, theSingapore company is big enough to shrugoff any change of heart. “The possibility thatAirAsia might do some of its work at Sepangwould not have any material impact on us,”said Tay.ST Aero, however, is keen to keep lowcostoperators happy. Currently they provide10% of revenue, a figure the MRO hopes togrow to 20% in the near future. “The LCCmarket is certainly a major new area and webelieve it will grow. The business potentialcould be significant,” said Tay.The company, which can provide thefull airframe, engine, component andengineering package or just individual partsof it, counts Jetstar Asia, Indonesia’s LionAir and Pacific Airlines of Vietnam amongits other Asia-Pacific customers. It providescomponent support for a string of China’snew private airlines. Outside the region ithas recently signed U.S. start-up SkybusAirlines, which will operate up to 66 A320s,on a total support programme.Elsewhere, SIA Technologies handlesTiger Airways and Cebu Pacific; HongKong Aircraft Engineering Company(HAECO) has Oasis Hong Kong Airlineson its books and Viva Macau has signed onwith Guangzhou Aircraft Maintenance andEngineering Company (GAMECO). AirAsiaalso has work done at Garuda’s MROsubsidiary, GMF AeroAsia, in Jakarta.The addition of long-haul operationsmay lead to a re-think at Virgin Blue,which has eight B777s on order. Currentlyits B737 heavy maintenance is carried outby Air New Zealand Engineering Services,but that contract ends next year. “Our MROrequirements are constantly being reviewedin light of our changing and expanding fleet,”said a spokeswoman. Virgin Blue handlesits own line maintenance at a new facilityin Brisbane.Also in Australia, Qantas Airwayssubsidiary, Jetstar, maintains its A320s itselfand hands line maintenance of its A330-200sto Qantas Engineering. Heavy checks on46 ORIENT AVIATION NOVEMBER 2007