Maintenance, repair and overhaul (MRO) company GMF AeroAsia (GMFA) will invest US$50 million to build a fourth hangar at its facility at Soekarno-Hatta International Airport in Jakarta.
Construction will start in June and the facility is expected to be operational 18 months later. The hangar will be able to accommodate a widebody aircraft and will also have a dedicated bay for painting and stripping – a capability that the company currently lacks.
GMFA President and Chief Executive Officer Richard Budihadianto says the investment will cover the costs of construction and acquisition of tooling and other equipment. The expansion is part of GMFA’s plan to increase capacity and capabilities over the next four years as its parent company, Indonesian national airline Garuda, expands its fleet to 122 aircraft by 2014, from 84 now.
Budihadianto says that, by then, Indonesia’s MRO market will be worth a staggering US$2 billion.
Garuda’s current fleet is made up of six Airbus A330-300s, four A330-200s, three Boeing 747-400s, and an all-Boeing single-aisle fleet comprising 40 Next Generation 737s, 17 737-400s, nine 737-300s and five 737-500s. GMFA’s three hangars currently can accommodate nine narrowbody and three widebody aircraft.
Budihadianto says GMFA will expand its capabilities to include airframe heavy maintenance (HVM) for Airbus A320s and A330s, once the fourth hangar is operational. The company now has C-check capability for both Airbus types, while also offering heavy maintenance capabilities and component repair and overhaul for Boeing 747 and 737 family aircraft, as well as McDonnell Douglas DC-10s.
GMFA is planning to add C- check capabilities for Boeing 777 widebody twinjets in 2012, when Garuda starts taking delivery of the ten 777-300ERs it ordered in 2008. Capabilities will be expanded to cover heavy maintenance only if the airline’s 777 fleet is expanded to at least 20 aircraft.
“Anything smaller than a fleet of 20 does not make business sense having HVM capability, as it would be too expensive acquiring the necessary maintenance tooling and equipment for the aircraft type,” Budihadianto says.
Garuda has phased out its DC-10 fleet, but GMFA maintains that HVM capability for third-party work, which Budihadianto says is gradually slowing as operators park the ageing aircraft due to high operational and maintenance costs.
GMFA has engine MRO capability for CFM International CFM56-3 power plants and an engine test cell rated to 100,000 lbs thrust. The company hopes to expand this capability to include -7B and -7C series engines, which power the newer 737NG aircraft.
GMFA has its own technical school which offers training to both in-house and third-party engineers and technicians. With certification from 25 international aviation authorities, including the US Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA), GMFA hopes to secure certification from the Civil Aviation Administration of China (CAAC) soon.
“China is a big MRO market to tap, but we need to secure the certification before we bid for contracts,” Budihadianto said.
In 2010, third-party work accounted for about 30 percent of GMFA’s revenue. Of this amount 30 percent came from contracts secured in Indonesia, while 70 percent was from the global market. Budihadianto expects the proportion of third-party work to drop by 5-7 percent in 2011 due to a projected increased in MRO work for anchor customer Garuda.
Budihadianto says that although GMFA posted a profit in 2009, sales dropped 20 percent due to the downturn in the MRO market that resulted from airlines’ capacity cuts in response to the global economic slowdown. GMFA has estimated it will see a similar drop in profit for 2010.
“We can expect business to return to pre-crisis levels from the second quarter of 2011,” Budihadianto says.
Budihadianto concedes that GMFA is not in the same league as Singapore Airlines’ SIA Engineering unit or Hong Kong Aircraft Engineering (HAECO), and would struggle to compete against them for contracts in the global market.
“We are, however, confident that with our pricing and industry standard turnaround time will enable us to secure third-party work,” the GMFA chief says.
The company has no plans for a listing on the Jakarta Stock Exchange, at least for the next two years. GMFA was established in 1984 as Garuda Maintenance Facilities Support Centre, before being spun off as a separate entity in 2002.
The company will hire and train another 500 technicians and engineers over the next two years expanding its workforce to 3,500 to cater for the projected growth in business.