Lion Air is investing $200 million to build a 20 acre (8.09ha) MRO facility in Batam, Indonesia.
Groundbreaking for the site was held some weeks ago and construction is scheduled to be completed by May 2013.
The facility will handle heavy maintenance for Lion's fleet and accommodate 16 narrowbodies or four widebodies concurrently, says the carrier's president director Rusdi Kirana.
It will also have facilities for engine, landing gear and component overhaul.
"Batam is a good location because it's near Singapore and also a free trade zone. For engine overhaul, there are also certain critical things we can't do ourselves, then we can ship to Singapore where there is a big CFM facility," says Kirana.
He adds that the maintenance of its fleet is now in the "honeymoon period", but 68 engines are expected to go to the workshop by 2017.
"We need to prepare now. If we depend on MROs outside Indonesia, there will be a lot of ground time and we also need to deal with customs and higher labour costs," says Kirana.
Lion now does heavy maintenance of its fleet at a leased hangar in Surabaya, which will close when the Batam facility is full operational.