The global MRO is projected to grow by RM123.5b in the next 7 years
by S BIRRUNTHA
MALAYSIA’S aspiration to take the lead in becoming the region’s top maintenance, repair and overhaul (MRO) service provider for the aviation industry is achievable, but there are many challenges that need to be addressed.
Aviation consultancy Endau Analytics founder and analyst Shukor Yusof told The Malaysian Reserve (TMR) that critical success factors for Malaysia to become a top regional MRO service provider include, among others, education and training.
He added that there is a growing need to provide specialised training and education for local talents in the MRO segment to survive in this increasingly competitive market.
Essentially, MRO is a critical component of the aviation industry, having been around since the early days of flight, as it allows planes to fly safely and efficiently.
Talent Retention, Expansion Beyond Klang Valley
Although the country may have the right talent in this segment, Shukor noted that retaining the talent is also a challenge as these specialists are enticed by better salaries overseas.
Apart from education and training, Shukor said the MRO needs to be spread out to other regions beyond the Klang Valley, for example, to Johor Baru (JB), Penang and Kota Kinabalu.
He noted that this will make the MRO segment in the country more appetising and profitable.
“Overall, I view that Malaysia’s participation in the MRO business is healthy, but it can be a lot healthier if there is greater political will to pursue this sector, which is a low-hanging fruit in the aviation industry,” he said.
Meanwhile, an Asean-based aviation analyst opined that Malaysia will always be secondary to Singapore in the MRO space, as it possesses huge and comprehensive capabilities compared to any other Asean countries.
He also highlighted that Indonesia is growing more aggressively in the MRO segment at the moment.
“Malaysia certainly has the potential to become a pioneer in the MRO segment, however, we need to remember that we are competing with bigger hubs in the Asean region.
“Unfortunately, against the wage level in Singapore, I do not feel that Malaysia possesses skilled talent in this segment,” he told TMR on condition of anonymity.
On that note, the analyst said
Malaysia can invest in developing a skilled workforce by providing training and education in MRO activities, as this will help address the shortage of skilled MRO personnel and provide a competitive advantage.
He added that Malaysia has already established itself as a leading aviation hub in South-East Asia, however, it should upgrade its infrastructure to support MRO activities.
“I don’t think our airport infrastructure planning is as forward-looking as Singapore.
“Therefore, we can look into growing our infrastructure and this includes building and upgrading facilities, investing in advanced equipment and technology, and providing logistics support,” he said.
Incentives For MRO Companies
Meanwhile, he said Malaysia can promote investment in its MRO industry by providing incentives for companies to set up operations in the country.
He noted that establishing a regulatory framework that promotes safety, quality and efficiency in MRO activities will also drive Malaysia’s participation in this segment.
“By focusing on these areas, Malaysia can become a leading player in the global MRO industry,” he said.
According to Malaysia External Trade Development Corp (Matrade), MRO activity has increased significantly with the increase of the global fleet, as reported by market research company Frost & Sullivan.
It noted that MROs are enhancing their capabilities to meet growing demand as the US$75 billion (RM330.75 billion) aircraft maintenance industry grows.
They achieve this by adopting digital transformation, technological innovation, efficiency, mergers, consolidation, acquisitions and partnerships.
As original equipment manufacturers vie for greater market share, airlines are splitting their maintenance services into separate MRO companies to create new revenue streams.
Additionally, data from the International Air Transport Association (IATA) for July 2022 revealed that demand for MRO services for cargo flights have increased from July 2021 to July 2022, tracking at or near pre-pandemic levels in the worldwide air cargo markets.
As such, Matrade, the National Aerospace Industry Coordination Office (NAICO) and the International Trade and Industry Ministry had recently organised the participation of Malaysian MRO services players in the Aviation Week MRO Asia Pacific 2022 (MROAP2022) in Singapore.
The participation was Matrade’s efforts in promoting Malaysia’s capabilities and strengths in the MRO industry.
It also served as a platform for the MRO companies to expand their brand’s presence and to connect with industry experts and thought leadership from all facets of the aeroplanes lifecycle including MRO, interiors and engine technology including networking opportunities that connect the participants with the full spectrum of the aviation industry globally.
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi had previously said that Malaysia must take the lead in providing the best MRO services in the aviation industry across the region.

Ahmad Zahid says Malaysia must take the lead in providing the best MRO services in the aviation industry across the region (pic: MUHD AMIN NAHARUL/TMR)
Graduates With High Marketability Rate
He said towards that endeavour, the Universiti Malaysia Institute of Aviation Technology (UniKL MIAT) can become a leading institution in the country to provide skilled MRO and aviation industry workforce.
“Malaysia wants to be known as an MRO service provider in the region. When I was the defence minister, MRO was one of my main focuses in promoting the defence industry.
“Now, we are looking at commercial and cargo flights, as well as a bigger market,” he said, according to a Bernama report.
Ahmad Zahid, who is also the rural and regional development minister, said other technical and vocational education training (TVET) institutions are welcome to collaborate with UniKL MIAT, because the institution has produced graduates with a high marketability rate and has worked in more than 20 countries, all over the world.
He added that meanwhile, the 280 TVET institutions under his ministry and its agencies have been instructed to work closely with industry players in ensuring their institutions’ graduates are in line with market demands.
Capital A’s MRO Facility
In January, Asia Digital Engineering Sdn Bhd (ADE), the engineering arm of Capital A Bhd (formerly known as AirAsia Group Bhd) announced that it has opened the doors to its new MRO hangar facility in Senai, JB.
In a statement, Capital A noted that this further strengthened its mission of delivering the best value, best-in-class MRO services with high efficiency across an extensive coverage of locations.
The 5,000 sqm hangar, built on 43.5ha of land at Senai Airport’s Free Industrial Zone (SAFIZ), is the first MRO facility at the Senai International Airport Aviation Park, and ADE’s third MRO facility.
With over 20 years of engineering experience servicing the low-cost airline AirAsia, ADE is extending its expertise and best practices in airline engineering with third-party airlines providing services including component support, line maintenance and base maintenance for various aircraft models, such as the Airbus A320 and A330 aircraft families with plans to grow their capacity to service other aircraft types in the future.
According to Capital A CEO Tan Sri Dr Tony Fernandes, the group owes a large part of AirAsia to the maintenance and high efficiency of ADE, and in turn, guarantees its fleet of work to ADE, which allows it to reduce costs for airlines, thus lowering fares for customers.
“Moreover, due to Capital A’s digital ecosystem with our investment into data, ADE has greatly been able to benefit using data science to increase efficiency, reliability and productivity.
“As a 21st-century engineering company driven by big data, we are sure that ADE will put Johor and Malaysia firmly on the map as a world-leading MRO provider for AirAsia and other third-party airlines within the region,” he said.
Fernandes also said upon opening the doors to this hangar facility, the group will further expand ADE’s presence in aircraft engineering to economically bustling countries in Asia Pacific.
Meanwhile, ADE CEO Mahesh Kumar viewed it as a golden opportunity for ADE to expand its presence and expertise in the MRO space, especially in bringing more foreign investments to the state and the nation in general through the aerospace industry.
“In line with ADE’s belief in appreciating and nurturing the community, we look forward to expanding our hangar facility functions into a training school for aviation professionals and aerospace engineering students nationwide and beyond.
“We believe the best way to grow our company and the community we serve is to invest in our own people by reskilling and upskilling them,” he added.
The global MRO is projected to grow by US$28 billion in the next seven years, from US$82 billion in 2018, according to Frost & Sullivan.
It noted that the Asia-Pacific region will be the second-largest market, accounting for 21% global value.
- This article first appeared in The Malaysian Reserve weekly print edition
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