Lion Group is investing $250 million to build an MRO facility at Batam's Hang Nadim International Airport, in a bid to attain maintenance self-sufficiency.
The Indonesian group has acquired a 25ha (62 acres) plot at Batam airport, a 50min ferry ride from Singapore. The facility, to be called Batam Aero Technic, will be opened in several phases.
In the first phase, it is building four hangars on a 4ha plot, construction of which started last September. These hangars will each be able to concurrently accommodate either three narrowbody or one widebody aircraft. They will focus on the heavy maintenance on Lion's fleet of Boeing 737s.
Lion is targeting to put the first two hangars in operation by end-2013, after it receives certification from Indonesia's directorate general of civil aviation (DGCA). The other two hangars will be operational by June 2014.
The group has also built a taxiway, which has been certified by the DGCA, linking the MRO to the airport's 4,000m (13,100ft) long runway.
The remaining 21ha of land will house two other buildings, which will include component repair and overhaul shops as well as an engine MRO centre that will also have a test cell. Construction of these facilities has yet to start as the land is still being prepared for development, but the target is to have them ready by 2016.
Showing the site to the media yesterday, Lion Technic's president Romdani Adali Adang says that besides working on airframes and engines, the plan is also for Batam Aero Technic to work on major aircraft systems such as landing gear, avionics and auxiliary power units.
He adds that the engine selection for the carrier's Airbus A320s on order has not been decided, because the plan is for the selected engine maker to help with its engine overhaul work.
Lion also has plans for Batam Aero Technic, which will require around 2,000 employees, to be certificated by the European Aviation Safety Agency, so that it will be able to do third party work on foreign aircraft.
"We chose Batam because of the land availability. We did look at Jakarta but the space is very limited. There is still room for expansion at Batam if we need it," says Romdani.
He adds that Batam was also picked because it is a free trade zone and its close proximity to Singapore means that there is easy access to necessary spare parts. Batam airport has carved out an 80ha plot of land for MRO work and several other players including GMF AeroAsia have also expressed interests in setting up shops there.
Lion Group's existing heavy maintenance hangar, which can accommodate two narrowbody aircraft, is located at Surabaya's Juanda International Airport.
Lion also plans to build another hangar at Manado, in east Indonesia. The land has been acquired and construction should start next year, says Romdani, adding that it should be operational by 2014.
Data on Flightglobal Pro shows that Lion has a fleet of 91 aircraft, almost all of which are 737s. It also has another 548 aircraft on order - including the 737 Max and A320neo.