The island of Okinawa in Japan is a popular holiday destination for travellers, but less is known about the island’s growing aerospace prowess.
At the heart of it is MRO Japan, the maintenance provider that counts the ANA Group as its major shareholder. Its maintenance hangar is a towering complex at Okinawa’s Naha airport, visible even from a distance away.
The company recently marked its 10th year of operations – and sixth year in Okinawa – having grown from a small outfit at Osaka’s Itami airport, to one that is handling an increasingly diverse customer base.
Takashi Shimamura is MRO Japan’s executive vice president of business development, and he speaks to Airline Business on the sidelines of the company’s 10th anniversary celebrations on 11 September.
Where the facility was “a sea of blue” – a reference to ANA’s signature blue livery – when it started, Shimamura notes in jest that it is now “different colours”.
Indeed, during Airline Business’ visit, an ANA Wings (the group’s regional operator) De Havilland Canada Dash 8 was undergoing maintenance beside a Skymark Airlines Boeing 737. Other aircraft spotted included those belonging to the Japan Air Self-Defense Force.
Shimamura notes that the mix of ANA Group business and third-party business is currently around a 54-46 split, and the “ideal goal” is for an even split between the two.
In a key development, the company in 2022 clinched EASA certification for MRO work on Airbus narrowbodies, widening its potential customer pool.
LIFE AT 10
At 10, MRO Japan is not exactly a fledgling upstart, nor is it a veteran in the industry.
It is something that Shimamura is acutely aware of. He acknowledges that MRO Japan is “a very small MRO” compared to its regional peers like HAECO in Hong Kong, or ST Engineering in Singapore.
“We cannot survive with the same strategies as other MROs, because our business…[and] our manpower is smaller,” he adds, while also conceding that MRO Japan cannot match the lower costs of some other Asian MRO providers.
But what it lacks in size and cost competitiveness, it makes up for in its punctuality and its specialisations.
Shimamura proudly points out that MRO Japan always “do our best” to meet maintenance timelines – and has largely been punctual.
MRO Japan also specialises in “high quality” livery painting, a capability Shimamura notes is not very prevalent in the region.
Underpinning all of this is the Japanese art of ‘Omotenashi’, which is a cultural concept of wholeheartedly looking after guests – or in this case, customers – that MRO Japan strives towards.
OKINAWA’S ADVANTAGE
MRO Japan shifted to Okinawa about six years ago, amid a push to grow the island’s aerospace sector, and to reduce its dependence on tourism as its key industry.
In that span of time, MRO Japan has grown into its new home – its tagline ‘From Okinawa to the world’ is testament to that. MRO Japan has also been increasing the hiring of Okinawans: about 90% of its engineers are now from the prefecture.
Okinawa, while not near the key hubs of Tokyo or Osaka, also has its advantages – especially for the company’s longer-term strategy.
Shimamura says the island’s location in south Japan puts it within four to five hours of key markets in the region, including Southeast Asia, allowing easy access for narrowbody jets.
The Southeast Asia region is a “key target” for MRO Japan, given the large number of narrowbody operators among low-cost carriers. At present, the MRO provider counts only two Southeast Asian LCCs – Batik Air Malaysia and Thai Vietjet Air – as its MRO customers.
Shimamura agrees that while Southeast Asia is home to a growing number of MROs – including those owned or linked to LCCs like Malaysia’s Asia Digital Engineering – he believes that demand is far outstripping supply.
“MRO capability [and capacity] is smaller than market demand. It is still an opportunity…for us to try,” he adds.
On the domestic front, Shimamura points out that the weaker Japanese Yen – a challenge for many carriers – has been a boon for the MRO provider.
“Many of our Japanese customers contact us… to look at taking on their heavy maintenance work… because they want to hedge the currency risks,” he states.
NEW OPPORTUNITIES….AND CHALLENGES
Shimamura outlines two key areas of growth MRO Japan is keen to tap into in the near term. The company is seeing increasing demand for end-of-lease MRO services, and has begun offering its services. On 12 September the company signed an agreement with lessor Airborne Capital to collaborate in the area.
He cites MRO Japan’s punctuality and “thoroughness” as advantages in handling end-of-lease maintenance work.
Shimamura also cites another area of growth: freighter conversions. The company is a relatively new entrant in this area, having signed a partnership agreement with conversions specialist EFW in November last year.
The agreement – the first of its kind with a Japanese MRO provider – will see MRO Japan work on converting Airbus narrowbodies into freighters.
While this “has the potential” to be a new revenue stream for the company, Shimamura says the skills required for freighter conversions will also keep its pool of mechanics and engineers “relevant”, especially in the area of structural maintenance.
However, Shimamura notes that the MRO provider has not had the chance to begin conversion, thanks to supply chain issues.
While it has not had a great impact on day-to-day MRO operations, Shimamura tells Airline Business that global supply chain pressures have meant airlines are keeping older aircraft flying for longer, indirectly delaying its stock of aircraft meant for conversion.
To this end, MRO Japan expects its first aircraft to be inducted for conversion in April 2026.
At the same time, Shimamura confirms that the company is looking to expand its current facilities at Naha, and is looking to build a maintenance hangar adjacent to its premises.
But if there is any indication of bullish expansion, Shimamura says the MRO provider will be growing slow and steady.
“We already [service] eight types of aircraft… and the running costs are… very high. But of course, it is up to the customers’ intentions. If they want us to maintain [a new fleet type], it will depend on the size of the contract,” Shimamura adds.