Malaysia Airlines in MRO deal with Lufthansa Technik

PETALING JAYA: Malaysia Aviation Group Bhd (MAG), the holding company of Malaysia Airlines Bhd, has signed an agreement with Lufthansa Technik AG to work together to establish a regional maintenance, repair and overhaul (MRO) facility.
The MRO facility, planned for 2017, would be based at Malaysia Airlines’ existing facilities at Kuala Lumpur International Airport and service the Boeing 737 and Airbus A320 family of aircraft.
The MRO deal marks Malaysia Airlines’ second attempt, after a proposed venture with GMR Hyderabad International Airport in 2008 fell through. Interestingly, Malaysia Aerospace Engineering Sdn Bhd (MAE), Malaysia Airlines’ MRO arm, was the one to step in after Lufthansa Technik pulled out of the MRO venture with GMR, citing unfavourable market conditions and rising oil prices.
In late 2014, however, MAE sold its 44.61% stake in the the joint venture back to GMR, after it said it could not pump in more funds into the loss-making venture.
“We are excited about the tangible benefits of the JV. Lufthansa Technik is one of the global leaders in MRO services, and the level of skill, expertise and technological transfer will be invaluable, both for us and for Malaysia”, said MAG and Malaysia Airlines Bhd group CEO Christoph Mueller said in a statement yesterday.
“Once this new joint venture becomes true, we will extend significantly our MRO capabilities in one of the most emerging markets worldwide,” Lufthansa Technik CEO Dr Johannes Bussmann said in the same statement.
The formation of the JV will be subject to approvals from the regulatory authorities and the signing of definitive agreements.
MAG is a newly established entity under Khazanah Nasional Bhd that has four business divisons: air transport, ground services, aircraft leasing and talent development. The air transport division has Malaysia Airlines, Firefly, MASwings and MASkargo under its wings.