Israel Aircraft Industries' deal with Garuda Indonesia maintenance arm ends its search for extra Asian capacity

Garuda Indonesia's maintenance, repair and overhaul (MRO) firm, GMF Aero Asia, has signed a subcontract deal with Israel Aircraft Industries (IAI) to convert some of GE Capital Aviation Services' (GECAS) Boeing 737-300 passenger aircraft into freighters.

"We will be working as a team and IAI will use our facilities to do the conversion work because they think we are competent enough and the customer is looking for a good price," says GMF Aero Asia vice-president marketing and development Bimo Agus, who confirms that the 737s belong to GECAS.

IAI recently received Israeli certification for its 737-300 freighter conversion, which is undertaken at its Bedek Aviation Group plant in Tel Aviv. The company has been looking for additional conversion capacity in Asia, having already reached an agreement for South African engineering company Denel to carry out modifications.

GMF Aero Asia has already signed a contract for the work, says Agus, adding that "this is the first time we have undertaken a freighter conversion. Normally, we just do maintenance, repair and overhaul work, but we believe we are competitive enough to do 737 conversions." Agus adds that the first 737-300 was due to be delivered to GMF in November, but "it is now likely to be the first quarter of 2004".

GMF will be converting 10 GECAS 737-300s to freighters and the work will take one or two years to complete. If it invests in a second production line, however, the work could be done within a year, says Agus. "We know the potential for 737 conversions is huge but we will have to wait until the actual market is good for us to open a second line," he says.

GECAS concluded a deal in June 2001 with IAI for the conversion of 15 Boeing 737-300/400s. It has since also awarded a contract to IAI's rival Pemco to convert six 737-300s.

Source: Flight International