Asia Digital Engineering (ADE), the MRO arm of Malaysia-based Capital A, expects to expand its hangar space in the near-term, in anticipation of an increase in maintenance work as travel recovers.

Revenues for the second half of this year is also expected to “grow substantially”, says ADE chief Mahesh Kumar, in comments made alongside Capital A’s second-quarter earnings.

ADE_hangar c AirAsia

Source: AirAsia

ADE currently has three operational hangars.

For the three months to 30 June, ADE reported a positive EBITDA of MYR27 million ($6 million), a six-fold increase year on year. The company adds that this is its highest quarterly profit since it was formed in late-2020.

Revenue for the quarter also hit a new high, at MYR75 million – a three-fold rise compared to the same period in 2021.

ADE’s Mahesh says the improvement in profitability is largely a result of “a lean and cost-efficent, digitally-enhanced and structured operating environment”.

He adds: “With three operating aircraft hangars currently, we expect to secure more aircraft hangars to support our aviation group and other third party airlines in the coming quarters. Revenue is expected to grow substantially in the second half of the year as airlines bring more planes back into service to meet the strong resumption of air travel demand.”

Parent company Capital A posted a positive EBITDA of about MYR109 million for the quarter, swinging from last year’s EBITDA loss of MYR197 million. However, foreign exchange losses and depreciation costs meant the company continued to post a net loss MYR491 million.