Sales of Asia Digital Engineering (ADE), the maintenance arm of Capital A Berhad, more than tripled in the second quarter to MYR75 million ($16.7 million) on the back of returning passenger demand and flights.
The improvement was driven by the four airlines of Capital A, formerly known as Air Asia Group, which combined carried 633% more passengers, year on year, in the three months to June 30, 2022.
This was achieved through 456% growth in average seat kilometers (ASK), resulting in an improvement of 38% growth in revenue per ASK. The group opearted 65 aircraft in the quarter, an additional 50 aircraft compared to the same period last year.
However, Capital A noted that airline profitability was held back by the maintenance costs of returning aircraft to service as well as currency movements.
For its maintenance arm, though, Capital A said that ADE’s “revenue is expected to grow in the coming quarters as ADE secures additional aircraft hangars to support the upcoming base maintenance demand.”
It added that it wanted to attract more third-party business. “ADE will continue diversifying its order book to have a more balanced mix with the goal of securing additional aircraft hangars to support the increasing base maintenance demands in the region.”
Earlier this year Capital A announced plans to build 380,000 ft.2 of MRO facilities at Kuala Lumpur International Airport (KLIA), a project that it expects to complete within two years.
“The new facility will be capable of handling both narrowbody and widebody aircraft, and we are keen to expand our capabilities beyond the current types of aircraft that we perform maintenance on,” said ADE’s chief executive Mahesh Kumar, in February.
“We are confident in our overall prospects to disrupt the aircraft maintenance industry in Asean creating jobs as we grow and delivering significant economic benefits across the value supply chain," added Kumar.
ADE’s current MRO capabilities include line and base maintenance services, spare parts workshop services, engineering maintenance services, component warehousing and digital and innovation services.
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