Malaysia's Airod has transferred its commercial aircraft maintenance business to sister company SME Aviation in a bid to win contracts from Asian low-cost carriers (LCC), starting with AirAsia.

SME Aviation, whose business was formerly limited to assembling and retrofitting general aviation aircraft, was transformed last week into a "budget" maintenance, repair and overhaul (MRO) centre. SME Aviation will initially repair Boeing 727s, 737s and Fokker F28s, but aims to add Airbus A320 capabilities to support a potential contract from AirAsia.

An Airod source says AirAsia is negotiating a maintenance contract with SME that would cover its existing 737-300s and future A320s. AirAsia, which now uses Singapore Technologies Aerospace for most of its maintenance, has 40 A320s on order.

The source says all of Airod's existing commercial aircraft maintenance contracts have been transferred to SME. But this business is small and only accounts for 10% of revenues at Airod, where the primary business is maintaining and upgrading military aircraft and engines.

A number of Airod employees will transfer to SME and some hangar space now controlled by Airod will be made available to SME. Airod's new joint venture landing gear shop with US firm AAR will also transfer to SME.

Airod and SME are both owned by National Aerospace Defence Industries and they have adjacent facilities at Kuala Lumpur's Subang airport.


Source: Flight International