Malaysia Air, EADS to Set Up Plane Repair Facility

A unit of European aerospace giant EADS NV tied up with Malaysia Airlines on Wednesday to set up its first aircraft maintenance and repair facility in Asia.

The facility is expected to be set up on the outskirts of Kuala Lumpur next year to serve medium range turboprop planes using the PW100 series engines including the ATR, the Bombardier Dash 8 and Fokker 50 aircraft, says Malaysia Airlines Chief Financial Officer Azmil Zahruddin.

There are currently some 100 such aircraft plying the region and this is expected to double by 2012, he says.

"There is a great opportunity for us to capture a fair sized market. We see it as a good opportunity now. By the time the economic downturn is over and things pick up, we will have this facility in place," says Zahruddin.

Malaysia Airlines unit, MAS Aerospace Engineering, earlier signed the pact with EADS SECA, the aircraft engine repair and overhaul unit of the EADS Group. EADS is the parent company of airplane maker Airbus.

Azmil declined to give the investment cost, saying details of the joint venture were still being finalized.

Apart from the facility in Malaysia, a mobile repair team will also be set up to service customers in Asia-Pacific, said an EADS senior official, Cedric Gautier.

This is EADS first such facility in Asia and the group will see if there is further demand to open more of such ventures, he says.

There are currently two other PW100 series engine repair facilities in Asia, based in Singapore and Australia, but this is the first one run by an airline and the market is big enough for three players, Azmil says.

Malaysia Airlines has nine ATR planes in its fleet and plans to increase the number of ATRs to 14 by year-end. Other carriers in the region using ATRs include Bangkok Airways and India's Kingfisher Airlines and Jet Airways.

The tie-up with EADS came a month after Malaysia Airlines scrapped a proposed joint venture with Australia's Qantas Airways for aircraft maintenance and repair due to the economic crisis.