AFI KLM E&M and Sabena technics have announced the signing of a partnership agreement to set up a joint venture to support Airbus A320 and ATR component repairs in Singapore’s new Seletar aviation cluster. South East Asia is seeing the world’s fastest growth in aircraft maintenance and AFI KLM E&M and Sabena technics already support large numbers of Airbus A320 family and ATR operators throughout the region. 
A competitive response to growing demand 
Setting up the joint venture will help both partners meet growing demand for MRO services throughout the region. This local entity will help curb costs and shorten TAT for client airlines, at the same time as it will allow them to benefit from the operational excellence of two market-leading MRO providers, ultimately delivering a competitive solution to the requirements of Asian airlines.
Anne Brachet, Executive Vice President AIR FRANCE KLM Engineering & Maintenance, said: “The creation of this joint venture with Sabena technics marks a new stage in AFI KLM E&M’s development of a global MRO network that combines a strong industrial home base in Europe and a growing local presence for our clients. It will operate on a complementary basis and in harmony with the existing and future Group’s service centers throughout the region and with our entire component support industrial footprint, comprising Barfield in the United States, Max MRO Services in India, AFI KLM E&M Components China in Shanghai, or AMES in Dubai. South East Asia is a fast-growing market for the MRO sector, and our aim is to satisfy our customers there with solutions that are ever closer, more efficient, and more responsive, at the same time as we meet the growing needs of all airlines operating in the region.”
A 50/50 Joint Venture
The 50/50 joint venture will begin operations in Sabena technics’ Singapore component repair shop, which is already operational at Seletar. The shop will support its mother companies on their PBH contracts and it will also offer Time & Material component repair services on A320 and ATR fleets to third party regional customers.
Rodolphe Marchais, Sabena technics’ Chairman and CEO, said: “Our Singapore shop is experiencing very rapid growth and is gradually broadening the spectrum of its repair capabilities to meet operator needs across the region. The alliance with AFI KLM E&M is a new step in the development of our presence in the heart of South East Asia and its extremely dynamic aviation sector. Adding state-of-the art technologies on the latest generation of aircraft will strengthen our position as a leading MRO in the region, with the highest levels of performance and quality.”

Despite being the largest MRO operator, it lags behind in revenue terms.

ST Engineering's ST Aerospace ranks as top in maintenance, repair and overhaul (MRO) in man-hours terms but it faces heating up competition from European MRO operators.

According to UOB KayHian, whilst being the largest operator, ST Aerospace lags behind European MRO operators, Lufthansa Technic and AFI KLM in revenue terms, due to higher engine and line component revenue.

"While there has been a spate of M&A out of North America ( MRO Holdings and Aeroman and Flightstar Aircraft services) and Europe (ST Aerospace and EFW, Airbus’s MRO and conversion arm), the Asia Pacific region has yet to see meaningful consolidation," UOB KayHian noted.

The brokerage firm said that in fact, hangar capacity has been rising, particularly out of Indonesia and Philippines, both relatively low-cost centres. The region could see more
alliances with European MRO operators as evidenced by Lufthansa Technic’s MOU for airframe and engine component JV with Garuda Indonesia’s GMF AeroAsia.

"The latter is also building a 25,000sf hangar facility at Batam. This will pose a direct threat to Singapore’s leading MRO providers," UOB KayHian said.

Pelesys, a leading aviation training solutions provider is pleased to announce that Thai Airways International (THAI) has selected Pelesys to provide a library of Special Operations courseware for their flight operations training, including Pelesys’ newest releases, Upset Recovery Training and Dangerous Goods.

Each course selected by THAI will be modified to meet THAI operational procedures and regulatory requirements for use in initial and recurrent training programs.

“For an airline business, pilot training is exceptional importance. THAI believes that Pelesys special operations courseware can provide both initial training and recurrent training for our pilots.

New training programs may be offered for THAI’s new aircraft types that will soon be delivered. Furthermore, Pelesys courseware can be regularly updated and adapted for new aircraft types and comply with the standards of ICAO, FAA, EASA and other regulatory agencies.

THAI selects high technology courseware training to maintain high quality operational standards to best serve our passengers.” says Captain Werasak Wiroonpetch, THAI Executive Vice President, Flight Operations.

Thailand is seeking to take on Singapore’s dominance in aircraft maintenance, repair and overhaul with a $5.7 billion upgrade of a Vietnam War-era airport.

Lockheed Martin Corp.’s Sikorsky Aircraft is the latest company to study a possible increase in MRO spend in Thailand in the wake of the planned revamp of U-Tapao International Airport, said Ajarin Pattanapanchai, deputy secretary general of the nation’s Board of Investment. In March, Airbus SE signed an agreement with Thai Airways International Pcl to evaluate the development of MRO facilities at the civil-military airport near Bangkok.

"Singapore is quite tight right now," Ajarin said in an interview at Bloomberg’s Toronto office on May 25, during a visit to Canada to woo investment. "To catch up with the demand of airlines in the region -- especially new demand from Myanmar, Vietnam, Cambodia -- and given that we have existing strengths with automotives and engineering, Thailand will be the second choice to be the MRO hub."

The airport project is part of junta leader Prime Minister Prayuth Chan-Ocha’s goal of boosting the economy, whose expansion has lagged behind neighbors since the military seized power three years ago. It’s also a key component of a plan to invest 1.5 trillion baht ($44 billion) between 2017-2021 to develop the country’s eastern seaboard.

Apart from the airport in the Eastern Economic Corridor, the plan calls for $4.5 billion investment in high-speed rail, $11.5 billion for new cities and $14 billion for industry. The government will control and maintain the airport and a port. Other projects will be public-private-partnerships or privately held.

"I am confident we can make it," Ajarin said, referring to raising the funds. The government has already allocated its budget for 2017, she said, declining to provide a figure for the administration’s outlay on the corridor or an estimate of the MRO business Thailand is targeting.

Foreign-direct investment has revived after sliding following the coup, especially in digital and high-technology sectors, Ajarin said.

She gave as an example Toronto-based Canadian Solar Inc., which applied for a license in 2015 and opened its Thai factory two years later. Among electric vehicles, a "big player -- but not Tesla -- is waiting to come in," Ajarin said.

FDI increased to $8.6 billion in 2016 from $2.7 billion in 2015, according to data provided by the Board of Investment.

While the board offers incentives to foreign companies such as tax sops, it remains unclear how quickly the Thai government can implement its ambitious vision for the eastern seaboard given the scale of the project.

Challenges include a shortage of skilled workers, as well as concern that Thailand is prone to harmful episodes of political volatility.

Proposed changes to Thailand’s aviation legal framework will prove more extensive than first thought, senior government officials have told AIN.

Initial proposals called for giving the Civil Aviation Authority of Thailand (CAAT) the power to draw up ICAO-compliant secondary legislation. Now plans call for the repeal all existing legislation and replacing it with one act to bring in all-encompassing ICAO rules for all the different subsectors of the aviation industry in Thailand.

“We rewrote the whole legislation,” Chula Sukmanop, director general of the Civil Aviation Authority of Thailand, told AIN on Thursday.

The legislation will cover safety, security regulations, economic and environmental aspects, said Sukmanop. Economic elements would cover issues such as licensing and the pricing of services, he added.

The new legislation will totally comply with contemporary international norms. “This law is going to give us the tool to fully implement the 19 ICAO Annexes,” Sukmanop told AIN.

Officials consider sweeping away Thailand’s former laws, which suffered the burdens of strict national security criteria, as a way to set the foundation for Thailand as an aviation business hub.

The founding act was written 60 years ago, when “everything was deemed national security,” explained vice minister Kobsak Pootrakool.

One mild concern, though, centers on the amount of time it will take to get the proposed measures on to the statute book.

Aergo Capital has taken delivery of one new 737-900ER (MSN 43188) aircraft from Boeing and leased the aircraft on a long-term lease to Thai Lion Air, part of the Lion Air Group. PK AirFinance, together with the Korean Development Bank, provided funding for the transaction on delivery.

“We are delighted to close our sixth aircraft transaction with the Lion Air Group and we are excited about working with Thai Lion as it expands its international operations,” said Fred Browne, CEO of Aergo Capital.

“We appreciate the great support of Aergo who is currently a lessor to 3 airlines within the Lion Air Group, across various aircraft types in a short timeframe. We look forward to deepening and strengthening this relationship further,” commented Edward Sirait, CEO of Lion Air Group.

Captain Darsito, Managing Director of Thai Lion Air, noted, “The B737-900ER is perfect for the Thai market and great for our business development. Currently we are flying to 12 cities in Thailand and 13 international routes. We hope to keep expanding our network with the support of great partners like Aergo Capital.”

Smith, Gambrell & Russell (English counsel), A & L Goodbody (Irish counsel), Mochtar Karuwin & Komar (Indonesian counsel), Clifford Chance (Thai counsel) and KPMG (tax consultant) acted for Aergo Capital while Thai Lion Air availed of the in-house legal team at Transportation Partners. Clifford Chance acted as lead counsel for Lenders.

Lufthansa Technik AG is filling important leadership positions to support its continued expansion in Asia Pacific (APAC).

Following the successful restructuring of the local sales organization, the Aircraft Overhaul and Component Services divisions will now also be managed directly from the region. With Elmar Lutter, one of the company's most experienced top managers is taking over the Aircraft Overhaul division in Asia Pacific. He will assume his new position on 1 June and work from Manila in the Philippines. During the course of his international career, Lutter has headed production departments within Aircraft Overhaul in Hamburg and Manila and worked as the CEO of Lufthansa Technik Budapest. Most recently, he was responsible for establishing and managing Lufthansa Technik Puerto Rico.

Burkhard Pfefferle-Tolkiehn, who will head Asia Pacific's Components division as of April 1, has chosen Hong Kong as his base. He has spent many years working in leadership positions within the Component Services division, most recently as Vice President in Hamburg, where he was responsible for the global material supply to more than 800 Lufthansa Technik customers.

With Gerald Steinhoff, Lufthansa Technik's sales organization relocated top management functions to the region as early as 2014.

Working from Singapore, Steinhoff and his team established new regional sales structures for Lufthansa Technik that have already brought impressive successes, resulting in annual revenue growth of over 20 percent.

These most recent staffing decisions are the next step in Lufthansa Technik's growth program in the Asia Pacific region. The company is following up its ongoing efforts of building and expanding production sites by establishing a local leadership structure directly in the region - in close proximity to the customer.

The Asia Pacific region is particularly important for the company, and has boasted growth rates in the double digits for years now. Extensive contracts for component supplies and landing gear overhauls were recently concluded with Go Air and Air India, for example. Initial successes have also been achieved with the new aircraft types - for example, with China Airlines as the first A350 customer for component supply in APAC. Many customers in the region have been working with Lufthansa Technik for years. The new appointments will now bring these cooperations to a new, local level.

The government will prioritize the development of U-Tapao airport as the cornerstone of the Eastern Economic Corridor, the new development zone east of Bangkok that will showcase Thailand’s advancing digital economy, along with a high-speed railway linking the area to Bangkok, the deputy prime minister in charge of the economy said last week.

The two projects are among five major infrastructure developments planned by the government for the three-province zone that policymakers consider essential for the future of the nation in terms of its economy, competitiveness and development. Aside from serving as a home to advanced industries, the Eastern Economic Corridor, or EEC, will also contain model, green communities for a better and more sustainable standard of living.

Aerospace and aviation are among the advanced industries that will be headquartered in the EEC. Therefore, the development of U-Tapao, an airport once used by the United States military, has been prioritized, both for its role in spurring the growth of aerospace and aviation in Thailand and for the major part it will play in linking the corridor with global markets through transport and logistics.

THAI Airways International has announced its intention to build the region’s finest aircraft maintenance, repair and overhaul facility at U-Tapao, and last week European aircraft maker Airbus signed an agreement to invest in the new facility.

“The government will accelerate the joint aircraft-repair center between Thai Airways International and Airbus and arrange regulations for public-private partnerships to shorten the EEC implementation period to three months,” said Deputy Prime Minister Somkid Jatusripitak, who oversees the economic ministries.