Newly formed maintenance company Malaysia Airlines Aero-Technologies is already looking at diversification.


MALAYSIA AIRLINES (MAS) IS NOW undergoing one of the biggest structural shake-ups since the country broke off its union with Singapore 25 years ago. From 1 April (the start of the next financial year), some 20% of the airline's 20,000-strong workforce was hived off to become part of MAS Aero-Technologies (MASA).

The re-packaging of the former MAS engineering division into a wholly owned subsidiary forms part of chairman Tajudin Ramli's 18-month drive to revitalise the once-moribund national airline. The new company's fiscal independence brings with it new freedom to broaden its business.

"If you talk to the chairman, the ambition is for MASA to be the Proton [the Russian launcher] of Malaysian aerospace - to be involved in a complete spectrum of aviation work from one end to the other," says MASA president Noor Amiruddin.

With the help of UK consultancy Arthur Andersen, the old engineering division's structure has been streamlined and an Emerging Technology and Projects unit created. New activities targeted include manufacturing, military upgrades, general-aviation (GA) maintenance and wider international co-operation.

"We want to get involved in aircraft manufacturing, but this will have to be done very carefully, as we're not really geared to it yet," cautions Amiruddin. MASA is using Korean Air as a model, and has talked to its aerospace division, to find the best way to develop a manufacturing capability.

MASA already produces wiring looms and panels for the locally built SME Aviation MD3-160 light trainer and has signed an agreement with Contour International of the UK to manufacture carbon-composite aircraft seats. The latter proposal's viability is still being assessed, and no final decision has yet been taken.

In line with the Malaysian Government's enthusiasm to master composite technology, Boeing has also been asked to assist with the establishment of a workshop, as an offset linked to MAS' recent Boeing 777 purchase. Rolls-Royce, for its part, is discussing co-operation in the field of non-destructive testing along with Trent turbofan overhaul (Flight International, 21-27 February, P10).

MASA is considering branching out into non-civil aerospace areas, such as military upgrades. This, however, raises the wider issue, of MASA's relationship with sister company, Airod and its traditional reliance on military work. "In the end, what may happen," suggests Amiruddin, "is that the companies merge under one organisation. I would prefer that we did."

The company will continue to focus on civil maintenance and overhaul. Its immediate priority has been to put its RM$300 million ($118 million)-worth of annual work from MAS on to a commercial footing. "We have to start costing all work we do for the airline and make sure we're in control of costs and have a revenue," explains Amiruddin.

Longer-term planning calls for MASA to reverse its overwhelming reliance on the parent airline in favour of third-party maintenance. "Today, [MAS accounts for] about 70-80% of the work we're doing," estimates Amiruddin. "We've got to change that ratio to one where we're not totally dependent on MAS."


Extra capacity will be created with the construction of a fourth hangar at Kuala Lumpur's Subang Airport and of a two-bay wide-body hangar at the new Sepang Airport, due to open on 1 January, 1998. Line maintenance and light checks will be transferred to the new airport, leaving Sepang to concentrate solely on heavier C and D checks, airframe modifications and engine overhaul.

It is planned to use some of the extra space to develop a GA maintenance capability and provide aircraft storage. "We're getting a lot of requests from business-jet people for hangarage," reveals Amiruddin.

MASA is also hoping to drum up added business through greater international tie-ups. Talks have been initiated with Lufthansa Technik, about possible work sharing. MASA would channel work to Germany, which could not be undertaken locally, in exchange for Lufthansa offloading its unwanted jobs.

MASA in particular, is looking at work-share-type arrangements to increase the throughput of work at its under-utilised Aircraft Engine Repair and Overhaul plant. Discussions have also been held with General Electric and Pratt & Whitney on using the site.

"We want to focus on the CFM56 and PW4000 engines and get more work in there," says Amiruddin. "If we can use it as a centre for collecting these engines, opening them up, replacing and repairing some parts, then the more difficult and heavy investment work can be done by [GE and P&W."

At the same time, MASA is pushing to expand the number of overhaul joint ventures in Malaysia, in an effort to cut costs and bring more regional work into the country. It faces strong competition, however, from neighbouring Singapore.

Nordam is discussing opening an engine thrust-reverser and nacelle service centre, despite having only just opened a similar plant in Singapore. "If we work with Nordam, we want to do a bit more work than they're doing in Singapore," argues Amiruddin, pointing to the fact that there are 52 CFM56-powered Boeing 737s in MAS service alone.



Source: Flight International