KUALA LUMPUR: Malaysian Airline System Bhd’s (MAS) maintenance and engineering arm, Malaysian Aerospace Engineering Sdn Bhd (MAE), is looking to emulate Singapore International Airline (SIA) by partnering with original equipment manufacturers (OEMs) to make aircraft parts as part of its expansion plans from 2020 onwards.

It is also mulling the setting up of repair centres to grow its business further.

MAE managing director Azhari Mohd Dahlan told reporters that the idea of joint ventures (JVs) with OEMs was mooted to widen MAS’ ability to offer third-party maintenance, repair and overhaul (MRO) services from its existing hangar.

Apart from that, Azhari said MAE also wants to, by next year, position itself as a data caretaker for other airlines in the region.

The new business ventures now look like viable opportunities after MAE has implemented a full suite of aviation solutions by India-based Ramco Systems Ltd to provide MRO support for about 145 end-of-lease MAS, MAS Wings, and Firefly aircraft.

He said MAE’s current MRO service is about 20 years behind SIA when it comes to bringing investment into the country and growing its business.

He further said the JV structure would be modelled on SIA’s tie-ups with OEMs. SIA has also set up its own repair centres.

“We are currently very focused on MRO. In order to move forward, we would like to engage in JVs with OEMs. We want to be different.

“For instance, SIA has JVs with manufacturers and has [its own] repair centres. We can look at manufacturing smaller parts such as seat belts. We can also support repair works if a manufacturing company in the US or Europe is looking for a partner in this region,” he said.

Azhari dismissed talk that it was unusual for an MRO service provider to go into manufacturing, adding that it could be done when one’s operational productivity and efficiency had improved.

MAE, he said, will see its efficiency improve by next year as the usage of barcode-enabled features and automation in Ramco’s technology allows MAS to reduce time spent on moving spares from suppliers to warehouses and hangars worldwide.

He added that the software will ensure the data of each aircraft, together with its parts that are being repaired or serviced and the technicians who handle them, are easily tracked and backed up on cloud computing.

“The process will further improve efficiency and enable continuous air worthiness, thereby reducing aircraft on-ground time. This is not only good for insurance purposes but also helps to change public perception.

“Billing and compliance with multiple regulator functions will enable MAS to improve efficiency and scale-up our MRO business to address third party airlines globally,” Azhari said.

Ramco’s software, which was picked by MAS following a request for proposal opened to enterprise resource planning (ERP) companies in 2013, replaced nine of MAS’ 14 legacy engineering systems for group-wide operations that are about 35 years old.

Declining to disclose the investment cost of the software, Azhari instead said MAS would be able to recover its return on investment in five years.

Azhari said the MAS subsidiary would first need to transform itself and do some “house cleaning” before it could enter into JVs because investors are now wary of MAS following the two tragedies involving its aircraft last year.

“We are talking to some [investors] but they are cautious after looking at the condition MAS is in now. Lots of companies are interested but there is uncertainty among them, like who is going to run the show,” he said, adding that MAE’s 80-acre (32.37ha) MRO hub in Subang has not been fully optimised.

This article first appeared in The Edge Financial Daily, on April 27, 2015.