(Bloomberg) -- Asia’s rapidly expanding airlines may face long waits to have their aircraft repaired and maintained amid surging demand, one of the region’s fastest-growing jet maintenance, repair and operations firms has warned.
“Our orderbook is filled through the end of next year,” Asia Digital Engineering Chief Executive Officer Mahesh Kumar said in an interview at the company’s brand-new 14-bay aircraft hangar at Kuala Lumpur International Airport on Monday.
The shortage of maintenance facilities and qualified staff across Asia presents an additional challenge to the aviation industry at a time when airlines are already struggling with heightened scrutiny over jet maintenance amid massive delays in new plane deliveries. Rising competition in the regional aircraft-repair market for new business and staff is also complicating the landscape.
Formed during the pandemic as a subsidiary of AirAsia’s Capital A Bhd., ADE has tapped into increasing regional demand for aircraft maintenance to grow from a single bay to its current facility with space for 16 jets. It now employs over 1,500 people.
The company’s emergence has exacerbated the battle to recruit and retain talent among established rivals such as SIA Engineering Co., GE Aerospace and Malaysia Airlines’ MAB Engineering Services.
SIAEC, the aircraft maintenance arm of Singapore Airlines, sparked concerns of workforce poaching when it expanded operations in Malaysia earlier this year. Malaysia Airlines lost about 15% of its engineering staff over the first few months of 2024, which authorities later said contributed to severe flight disruptions at the country’s national carrier that forced it to temporarily cut its schedule by 20%.
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Initially formed to service AirAsia’s fleet of nearly 250 planes, ADE has diversified to serve other carriers. The outfit is looking to expand its non-AirAsia business to 30% of its total volume within the next year, Kumar said, up from the current 10%.
The company plans to add four more bays over the next two years, taking its total to 20, as it looks to position Malaysia as a leading hub for maintenance, repair and overhaul activities in Southeast Asia.
“There’s huge space to grow,” Kumar said, pointing out that airlines are now looking beyond Singapore, currently Southeast Asia’s leading MRO hub, as the island-state reaches its maximum capacity to deal with rising global demand.
ADE is actively looking at mergers and acquisitions to further expand its activity, although it is not currently planning to raise further funds. Parent Capital A has said it may pursue a public listing for ADE in the future.
Its rivals are investing more to meet the growing demand too. GE Aerospace, which employs 2,700 people in Singapore, Malaysia and Australia, recently announced a $1 billion investment to expand its global jet-repair capacity, with $45 million allocated to the Asia Pacific region.
SIAEC last year signed a 15-year lease for two hangars near Malaysia’s Sultan Abdul Aziz Shah Airport, which can accommodate four wide-body bays. The expansion will take its capacity to 11 hangars and 20 aircraft bays. The company says challenges remain for the global jet-repair industry despite strong growth that will likely see the region’s aircraft fleet become the world’s biggest by 2034.
“The global MRO industry has had to rapidly ramp up production and maintenance to historic levels, while dealing with fewer employees and inflationary and wage pressures,” an SIAEC spokeswoman said in a statement. “We think this situation will continue as the manpower shortages will not resolve soon.”
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