Fast 5: GMF AeroAsia Looks To Partnerships, Capability Additions
Andi Fahrurrozi, CEO at Indonesian maintenance provider GMF AeroAsia, discusses where it is looking to leverage partnerships and add further airframe capability.
How is GMF’s recovery continued in 2023? Where has the company seen demand?
In 2023, GMF has continued its recovery and is currently on a positive performance trend. The company has seen significant progress, including achieving a positive profit until August, marking a significant milestone in its recovery journey.
One of the key areas where GMF has experienced a growing demand is in airframe and aircraft engine reactivation. As the aviation industry rebounds from the impact of the COVID-19 pandemic, many airlines are looking to reactivate their grounded aircraft. This surge in demand for airframe and engine reactivation services has presented a valuable opportunity for GMF to expand its business and contribute to the industry's recovery. Additionally, GMF's positive performance is not limited to just these areas. The company has also been proactive in diversifying its service offerings and exploring new opportunities in the aviation sector. This strategic approach has allowed GMF to adapt to changing market dynamics and stay competitive in the MRO industry.
Do you have any concerns about MRO capacity shortages? If so, where, or how are you looking to add more capacity?
Our widebody aircraft hangar is currently fully booked, showcasing strong demand for our services. However, we still have an available slot in our narrowbody hangar, and we are actively seeking a partner to join us in expanding our base maintenance capabilities.
We acknowledge that the aviation industry is facing challenges in several areas, particularly in engine maintenance and parts availability. These challenges have resulted in longer repair turnaround times (TATs) due to high demand for aircraft reactivation and technical issues stemming from OEMs.
The aviation sector has witnessed a surge in demand for engine overhauls and repairs as airlines reactivate their grounded fleets. This heightened demand has strained available engine maintenance capacity, leading to delays in servicing engines and returning them to airline operations. GMF recognizes this challenge and is actively exploring options to expand its engine MRO capabilities. Another significant concern is the shortage of critical aircraft components and spare parts. We are working closely with its suppliers and exploring alternative sourcing options to mitigate these parts shortages and ensure a steady supply for its maintenance operations. The company is also exploring partnerships and collaborations with other MRO providers to leverage additional capacity and expertise. We are committed to finding solutions to these challenges by considering capacity expansion measures and working collaboratively with partners and suppliers.
Are cost rises impacting Indonesia, a country that can compete as a low-cost market? If so, where?
Cost rises, particularly in parts and materials, are indeed impacting Indonesia's position as a low-cost market. This impact is particularly relevant in industries like aviation, where cost efficiency is a critical factor. The MRO relies heavily on a steady and cost-effective supply of parts and materials. When these costs increase, it can lead to higher operating expenses for MRO providers and airlines alike. To maintain competitiveness, we must adapt to these cost increases and continue to seek ways to manage expenses effectively while providing high quality products and services.
Where is GMF AeroAsia looking to add capability?
GMF is prioritizing the optimization of its widebody capabilities, with a strong emphasis on aircraft types like the Boeing 777, Airbus A330 and the 747. While the the 747 may be in a sunset era, we remain committed to exploring profitable opportunities in its maintenance for the next five years. Additionally, GMF is proactively developing its capabilities in newer aircraft types such as the787 and A350 to stay at the forefront of the evolving aviation landscape.
What is the percentage split of work between Garuda Airlines and third-party MRO business?
For airframe maintenance, GMF has consistently served up to 60% of customers from non-group affiliations. However, with our active involvement in aircraft reactivation projects, especially in engine maintenance, our customer distribution has evolved, and the current split between Garuda Indonesia Group and non-group affiliation stands at 75%-25%.