MRO Competition Intensifies In Indonesia

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MRO Competition Intensifies In Indonesia

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Lithuanian MRO provider FL Technics is doubling its presence in Indonesia with the construction of a new MRO hub in Bali.

This will supplement FL Technics Indonesia’s existing facility in Jakarta, which achieved its Part 145 certification five years ago and offers heavy checks as well as other maintenance services for Airbus A320 and Boeing 737 aircraft from a 15,000 ft.2 hangar at Soekarno-Hatta International Airport.

The Bali facility is being constructed in partnership with PT Angkasa Pura Properti, to create a six-bay, 17,000 m2 (approximately 183,000 ft.2) facility for narrowbody aircraft.

FL Technics’ desire to expand in Indonesia is understandable given the growth prospects of the country and the wider Southeast Asia region, as well as Indonesia’s vibrant airline sector.

The country has seen some failures and restructurings in recent years, but also new entrants to fill gaps as soon as they appear.

This turbulence has been reflected in the results of FL Technics Indonesia’s listed competitor, GMF AeroAsia.

Mostly reliant on sales to flag carrier Garuda Indonesia, which entered restructuring during the pandemic, GMF suffered a huge dip in business that in 2020 pushed it into breach of certain financial covenants and forced it to request a waiver from creditors and a restructure of its bank loans.

The MRO provider has since restructured portions of its debt. In the first six months of this year its operating cash flow climbed to $6 million from negative in the prior-year period.

While sales are still below the pre-pandemic period, GMF is pursuing initiatives such as greater widebody maintenance services to take advantage of the growing air cargo market, it said. 

GMF’s main base is at Soekarno-Hatta International Airport near Jakarta. It comprises a 67,000 m2 (approximately 721,000 ft.2) narrowbody maintenance hangar—the largest in the world—as well as a 22,000 m2 widebody maintenance hangar, a 23,000 m2 light maintenance hangar and another 23,000 m2 hangar with Airbus A330 maintenance facilities. 

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