Indonesia's largest privately-owned carrier Lion Air is proceeding with plans to establish a maintenance, repair and overhaul (MRO) firm at Surabaya's Juanda Airport.
Construction of the hangar at Juanda Airport will start in next year's first quarter. It will be used for Boeing 737 line and heavy maintenance, says Lion president Rusdi Kirana.
The hangar will be next to Merpati Nusantara's MRO business, says Rusdi, adding that Merpati will be allowed to keep its MRO there.
The hangars are at a section of the airport that the Indonesian Navy controls. Lion has signed an agreement with the navy to jointly manage and develop that section.
Rusdi says they are now waiting for the Indonesian defence minister to approve the deal.
Lion wants an MRO business because it is cheaper and more reliable to do heavy maintenance in-house, says Rusdi, adding that the new MRO business will do the heavy checks on Lion's Boeing 737-900ERs.
It has a fleet of 26 737-900ERs with one new aircraft coming each month until 2011 and from 2012 it will be two 737-900ERs each month, he adds.
Lion has also signed a firm order for 15 ATR 72-500s, with the first three to come next month, he adds.
Rusdi says Lion plans to do the heavy checks on the ATR 72s rather than send the turboprops to MRO firms overseas.
It is too expensive ferrying aircraft overseas and labour is cheaper in Indonesia, he says, adding that "labour accounts for 60-70% of the costs of a heavy check and the rest is materials".
Lion's move to bring 737-900ER airframe heavy checks in-house will eventually impact Garuda Indonesia's MRO firm GMF AeroAsia.
GMF announced in May that Lion had signed a new three-year contract to have GMF do heavy checks on its jet aircraft. Lion is one of GMF's largest customers.
Rusdi says Lion has no plans to perform heavy maintenance checks for third parties and that Lion will continue to outsource engine overhauls.
Source: Air Transport Intelligence news
