Malaysia Airlines Aims To Diversify Its MRO Capabilities

What are the key elements of Malaysia Airlines’ maintenance strategy?

Nadzir: A key part of our strategy is to ensure that our service enables operational excellence. We are looking at diversifying our competencies and our capabilities. We are not just looking at airframe maintenance but also at component repairs. Additionally, we are looking at developing people. We have developed comprehensive in-house training programs to ensure that we have a continuous pipeline of skilled workers. It is very important to ensure that we have a strong talent pipeline to support our growth strategy.

Eke: During the pandemic, we capitalized on digitalization and technologies to make us more efficient. But there still is the challenge of sustainability: How do we minimize or eliminate waste, and how do we repurpose things? We are also thinking about our carbon footprint. For instance, the carbon footprint is bigger if we send components to the U.S. for repair. So if we want to perform those repairs in-house, we need to develop new capabilities to reduce our carbon footprint.

What percentage of Malaysia Airlines maintenance is carried out by MAB Engineering and how much is outsourced?

Eke: MAB Engineering performs all of the base maintenance and line maintenance activities for Malaysia Airlines. We also have component repair shops. The engine maintenance work is outsourced.

How is Malaysia Airlines leveraging digitalization to enhance its aircraft maintenance operations?

Eke: In the post-pandemic landscape, digitalization is the key. One of our beliefs is that digitalization is master of the universe. We have one MRO enterprise resource planning system that integrates everything. We have a “big data” warehouse—Skywise—from which we build a workflow. Additionally, we also have Power BI and some machine learning to provide us with the crystal ball to really embrace predictive maintenance.

One of the areas that we are embarking on is paperless maintenance. Currently we are working closely with the regulators, and we are on the final lap of getting an approval from the Civil Aviation Authority of Malaysia. We are the first organization in Malaysia that is implementing a whole-paperless maintenance process.

Our dream is that instead of pulling the information from staff, we push the information [they need to them], including relevant manuals, to improve productivity. We are exploring mobility and have partnered with an unnamed service partner to co-develop a solution. If everything goes well, this could go live in 2024.

Are there any updates on the smart hangar concept?

Eke: We would like to go into the concept of human-led operations and digital record keeping. Furthermore, we would like to develop 3D printing, which could help offset supply chain problems. The challenge is to get regulatory approval. It could be helpful to partner with a Part 21 design house, and we would need POA—production overhaul approval. We would like to engage with a provider that is able to supply us the skills and technical knowledge to develop this. We could also partner with any university to help us with this.

In May, MAB Engineering was appointed as an authorized repair center by Spirit AeroSystems for nacelle and flight control surfaces repair. 

What benefits does MAB Engineering anticipate with this appointment?

Eke: Our recent partnership with Spirit AeroSystems will help us grow. Today we are only rated on level two repairs, but with this partnership, we will be able to reach level three. Spirit AeroSystems brings technical expertise and tooling to help us acquire level three. We are appointed as an authorized repair station and with that, there are certain baseloads that will come to us. Hence, it brings us greater market opportunity as well as greater revenue.

Spirit AeroSystems is a giant in terms of repair capabilities. If you look in the region, there are a lot of Boeing 737 and Airbus A380 aircraft operators. Today, with this partnership, we can develop Boeing 737 authorized repairs that we can bring to the market. We have certain numbers of repairs that are coming to our center. 

How does Malaysia Airlines address supply chain-related challenges in its aircraft maintenance operations?

Eke: It is difficult to get the parts because logistics are a lot higher-priced due to inflation, and it is getting more expensive to get the parts. The supply chain is a real challenge. But we are living in a world where information is the key. We have Skywise as our big data warehouse. So there are a lot of insights, and we can turn this information into demand planning. With this information, we can communicate effectively with our suppliers. Additionally, for us to be correct about lead times and turnaround times, we have changed our provisioning model. Also, we have a pooling arrangement not only with our providers but also with certain OEMs to ensure that we have the right parts at the right time and in the right place.

With ongoing labor shortages, what measures have been taken to ensure a pipeline of skilled technicians?

Nadzir: We have established training programs with various colleges and approved training organizations. We have also developed an accelerated apprenticeship program, and those who already have their basic license can also join us. We have our own training school and have collaborated with the department of skill development. This partnership enables us to have a program that prepares our graduates to explore other areas of the industry if they wish. The program gives us access to government funding. That means the students can apply for scholarships, and it helps to reduce their financial burden.

We are also continuously looking at how to retain our staff. Therefore, we do periodic salary reviews and continuous benchmarking with what the market is offering. We always try to ensure that we are among the best-salary employers in Malaysia. We try to make a good environment for our employees. We emphasize safety and the positive work culture to ensure that there is a good work-life balance.

How does Malaysia Airlines anticipate the market to evolve in the coming years? How has the company positioned itself to meet the growing MRO demand in the region?

Nadzir: According to an International Air Transport Association report, approximately 40,000 aircraft will be entering into service over the next 15-20 years. We are actively monitoring market developments for both the demand and supply side. We are making sure that we have enough resources to accommodate the growing demand. One of the things we are looking at is growing our hangar capacity. We are looking at both organic growth options and if there is an opportunity, then potentially an acquisition. We are considering developing partnerships in the region and building more component repair shops. We strongly believe that the demand will be there, and we need to be ready for it.

Eke: The Asia-Pacific is one of the fastest-growing markets, and we are well-positioned in this region. There are a lot of opportunities for us. The post-pandemic landscape has changed, and we need to innovate in terms of new capabilities and services. Today we are concentrating on airframe-related services. For us to be competitive, we need to master the three key metrics: time, cost and quality. That is why we need to expand on our higher-value-added services. 

Thus, we are looking into the components segment. Along with becoming competitive in terms of our product offerings, there is a need to strengthen our operational key performance indicators. That is how we will be able to differentiate ourselves—being an efficient and reliable service provider in the region. For us, the most important thing is customer intimacy and how we can build the customer relationship using digital technologies.

Airline Fact File

Headquarters: Sepang, Malaysia

Fleet: The airline operates a fleet of 67 aircraft, comprising six Airbus A350s, 20 A330s and 41 Boeing 737s. Malaysia has orders in place for a total of 40 aircraft, consisting of five ATR 72-600s, 10 A330s and 25 737s. Deliveries for the 737s are scheduled to start in third-quarter 2023, after several delays.

In-house capabilities: With  regulatory approval from more than 12 authorities around the world, MAB Engineering, the airline’s engineering and maintenance division, provides line and base maintenance services for several Airbus, Boeing, ATR and De Havilland Canada aircraft. The company also provides component repair (C-rating) services for safety equipment, wheels and brakes, avionic instruments, aircraft propellers, engines and APUs. Specialized services include fleet technical management, borescope inspections, European Union Aviation Safety Agency Part-21 DOA, and interior and exterior cleaning.

Hangars and line stations: MAB Engineering has four hangar facilities located at its home base in Sepang and Subang, Malaysia, with a total of 10 aircraft bays for widebody and narrowbody aircraft. The company also offers line maintenance services across 17 stations throughout Malaysia.