Royal Brunei Airlines plans to spin off its maintenance, repair and overhaul (MRO) business later this year into a separate subsidiary that will initially be wholly owned by the airline, but eventually part-owned by a strategic foreign partner.

The exact timing of the spin-off depends on the airline's ability to transfer its European Joint Aviation Authorities certification and other regulatory licences to the separate MRO subsidiary, Royal Brunei chief executive Peter Foster said at Asian Aerospace. The nature of the work the MRO firm carries out in the longer term will also depend on what the foreign joint-venture partner can deliver to the business.

While the future work scope and exact timing of the spin-off is unclear, Royal Brunei is certain it will maintain an equity stake even though under Brunei law foreign companies are permitted to buy local firms outright.

"Royal Brunei would want to maintain a strategic shareholding [because] we will be the MRO firm's largest customer, so it is important for us to maintain a stake," says Foster. He also says the carrier's rationale for spinning off the MRO business is to enable the carrier to focus on its core business.

Royal Brunei's MRO business currently performs maintenance work on Boeing 757s and 767s.

Source: Flight International