From his office, GMF AeroAsia’s president and chief executive, Iwan Joeniarto, has a bird's eye view of the wide range of aircraft in its hangars, which point towards its goal of becoming a global top 10 MRO provider by 2020.
When FlightGlobal visited its Jakarta Soekarno Hatta headquarters, the company was servicing aircraft in the colours of Iraqi Airways, Indonesia AirAsia X, Sriwijaya Air, Max Air and Regent Airways, among others.
Although the company is a unit of Garuda Indonesia, Joeniarto says it is looking to reduce its dependence on the parent airline: "It is our strategy to diversify into getting other captive airlines. We cannot depend on just the Garuda Group. We want to be a sustainable company."
He adds that of the total revenue received in 2017, 65% came from Garuda, and the rest from third-party businesses. In the first half of 2018, revenue from Garuda fell to 52% as its third-party work grew.
"Our target is that in two to three years, our third-party revenue will reach 60%. This is the fastest way that we can reach our $1 billion revenue goal and be a top 10 MRO company in the world [by revenue] by 2020."
GMF primarily conducts airframe maintenance on a wide variety of aircraft and is looking to invest in building up capabilities for various components and engine types.
At present, its engine work focuses on the CFM International CFM56 family, as well as Pratt & Whitney Canada PW100 series turboprops. Joeniarto admits GMF will need to build capability in new-generation powerplants such as the PW1100G and Leap as carriers transition to the Airbus A320neo and Boeing 737 Max.
"The value of MRO today is in components and engines, especially for the new-generation narrowbodies. Asia will be taking delivery of many of them in the future and we are establishing capability for heavy airframe checks on the A320neo and 737 Max by end of next year, but we are still evaluating the GTF and Leap capability."
He acknowledges that it will take substantial investment and time to develop, and that it will be most feasible when GMF pursues this with its new strategic partner.
Since listing 10% of its shares on the Jakarta bourse in October 2017, GMF has reserved another 20% of its stock for a strategic investor that can provide funding and transfer knowledge to improve its capabilities.
Joeniarto says the company has until the end of the year to select its partner, after Jakarta granted an extension on the previous deadline of 30 June.
GMF has narrowed the list down to three candidates, of which all are among the top five MRO companies in terms of revenue. “All three offer interesting work and terms for the partnership”, adds Joeniarto.
A Reuters report on 23 January said Air France Industries KLM Engineering & Maintenance was the winner, but Joeniarto refuses to comment on it.
"The strategic partner will bring many benefits, new capabilities, and transfer of knowledge and MRO management. They will also allow us to become a 'total solutions provider' and we can grab regional and international business together, as they will bring their existing markets to GMF."
One key tenet of GMF's ambition to become a top 10 MRO company is further overseas expansion – particularly in the Middle East and Australia.
Joeniarto says the company is "intensively" completing its business plan to establish a facility at either Sharjah or Al-Maktoum airport in the United Arab Emirates. It is in talks with three potential partners for the facilities, but he will not identify them. An announcement on the location and partner is likely before the end of the year.
The facility will be established in stages, with an initial hangar set-up that can accommodate three narrowbodies simultaneously. It is expected to be operational in the second half of 2019, with the focus initially on medium checks for narrowbody aircraft and expanding to widebodies in the future.
"We want to grab business from the Middle East airlines and those in South Asia. By having a facility there, we are helping such airlines with their fuel burn as they do not need to fly aircraft to Jakarta."
GMF is also moving forward with plans to expand into the Australian line maintenance market through an agreement signed earlier this year with Australian aviation services company Korr Group. That partnership is also set to launch in the fourth quarter of this year.
The move will see both parties jointly provide line maintenance at Melbourne, Sydney and Perth airports for Boeing 737s, 787s, A320s and A330s operated by a range of carriers.
Korr already provides MRO services to the Qantas Group, Air New Zealand and Virgin Australia.
Despite GMF's overseas ambitions, the company is not putting all its eggs into one basket – and is looking at further expansion at home as well.
The MRO provider plans to build a hangar on the Indonesian island of Batam by the second half of 2020, which will focus on narrowbody work for Garuda and Citilink. The hangar will start with two lines for narrowbody work, before adding another two to cater for greater demand.
Joeniarto says GMF is currently working with a financial institution on the feasibility studies and has received support from the Indonesian government in the form of lower taxes and logistics support to establish the Batam hangar.
"Batam is near Singapore, where we can get spare parts easily via shipping," he explains. "Starting operations with business from Garuda Indonesia and Citilink also guarantees us a minimum workload, and the capacity can be accelerated when we grab business from Southeast Asian airlines like those in Myanmar and Vietnam. Batam will be closer to them than Jakarta."
In the east of the archipelago, GMF is looking to deepen its partnership with Surabaya-based Merpati Maintenance Facility, the MRO arm of defunct carrier Merpati Nusantara Airlines.
Both parties currently operate the MMF facility in a 60:40 split in terms of manpower and workload, with GMF having the larger share.
While GMF had indicated interest in acquiring MMF from a state-owned asset management company, Joeniarto says that going forward, it wants to use the Surabaya facility for MRO support on ATR turboprops and general aviation aircraft, as well as potentially defence work.
Source: Cirium Dashboard