Lion Air’s technical arm Batam Aero Technic (BAT) and Garuda Indonesia’s MRO unit GMF AeroAsia have inked a cooperation agreement that will see them jointly build and operate hangars on the Indonesian island of Batam.

The two will build eight hangars that can accommodate up to 24 narrowbodies. This would help increase capacity for maintenance work done in Indonesia, and minimise work sent abroad.

With the hangar facilities up and running, the companies hope to reduce the amount of MRO work sent overseas by 10% in 10 years.

Both BAT and GMF AeroAsia will also work with aircraft tire manufacturer Michelin to construct a tire retread facility. This, the companies state, will increase domestic rubber absorption and boost operational efficiency.

GMF AeroAsia’s acting chief executive Tazar Marta Kurniawan says both BAT and GMF AeroAsia will coordinate their capabilities and capacity to avoid “double investment” in the joint venture.

Tazar adds that the “synergy” between both companies would help GMF AeroAsia grow its reach in the Asian market, and add to the Indonesian MRO industry’s competitiveness globally.

FlightGlobal reported in January that Garuda and Lion Air were in initial stages of discussions over an MRO joint venture.