Published May 14, 2009

MAS, EADS units to enter joint venture

They will set up maintenance and repair organisation for PW100 engines

By PAULINE NG
IN KUALA LUMPUR

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MALAYSIA'S MAS Aerospace Engineering (MAE) and France's EADS SECA plan to establish a joint venture maintenance and repair organisation (MRO) for PW100 series turbo-prop aircraft engines by next year.

The joint venture facility between MAE and EADS SECA will be in KL and is planned as a one-stop centre for PW100 series engines, airframe and component support.

The Kuala Lumpur-based MRO will be the third in the region after Singapore and Australia, and its biggest selling point will be a lower cost structure.

A memorandum of understanding (MOU) was signed yesterday between MAE, a fully owned subsidiary of national carrier Malaysia Airlines, and EADS SECA, a Pratt & Whitney designated aircraft engine repair and overhaul facility owned by the EADS group.

The facility is planned as a one-stop centre for PW100 engines, air-frame and component support, said MAS executive director and chief financial officer Azmil Zahruddin.

'Our immediate plan is to set up an engine maintenance and hot section inspection capability (HIS). The capability will be extended to line maintenance support and on-site HIS through a mobile repair team,' he said.

An estimated 100 aircraft in the region are equipped with PW100 engines, and the number is expected to double by 2012. The growth potential appeals to EADS SECA, which is testing the water via the proposed MRO - its first 'airline-anchored' set-up.

It plans to expand the facility if demand is strong, said chief executive Cedric Gautier.

MAS has nine ATR aircraft equipped with the PW100 engines, and the number will rise to 14 by year-end. These engines are now serviced in France. EADS SECA will take responsibility for the fleet by deploying permanent engineering staff in KL, Mr Gautier said. 'Initially there will be one person, but it could be 10 or 20 people (later) depending on market demand,' he said.

The two parties have yet to determine the equity structure of the joint venture or the planned investment. However, they are confident that the aviation industry will recover from the current downturn and want to have the facility in place to capitalise on opportunities when the global economy turns around.

MAS's aborted joint venture with Australia's Qantas illustrates the difficulty of bringing such plans to fruition. The two airlines signed an MOU in December 2007 to establish an MRO in Malaysia to serve bigger commercial aircraft. It was to have been operational last year, despite Australian union anger at the outsourcing of jobs.

In any event, the tie-up came to naught after the Australians decided this month to can it, citing slumping economic conditions.