Page 20 - AAA MAY-JUNE 2012 Online Magazine

FEATURE MRO IN ASIA

Low-cost carriers drive growth big orders for new aircraft and because
all this is good news for the asia-Pacific budget carriers tend to outsource mro,
mro industry. The year 2010 represented business for mro providers is set to
the bottom of the mro business cycle boom.
from which it has moved up. The interestingly, unlike the West, asia
challenge will be to align mro business has fewer older aircraft with plenty of
strategies for success with the new new generation aircraft like the B787,
reality of a delicate recovery. Cost will B747-8, a320neo and a380 making
remain a singular focus by airlines, and their presence felt. all these have new
mro operators need to plan for this. technologies, resulting in the forging of
Leading the customer pack are new partnerships and service offerings.
budget carriers. asia had around 40 at in parallel with this, oems are getting
last count, and in india alone around 75% more aggressive by including after-
of seats are sold as budget seats. Within market support as a major revenue
Japan, the impact of LCCs is expected source – so some third party providers
to be highly disruptive for full-service are increasingly finding themselves
carriers. LCCs are expected to account for being squeezed.
one in five passengers soon. major LCCs airbus Flight hour services (Fhs),
such as air asia, Lion air and indigo have for instance, delivers a comprehensive

Historic MRO Activity MRO Revenue Breakdown
Billions USD$
$45.0
$42.2 Op Profit
10%
$37.8 $36.1 $37.0 $38.3 $38.8 10.35 HMV & Mods REvENuE ITEM COST AS %
OF RvENuE
14.1 10 SG&A Direct Labour 44%
12 10.7 11.6 11.5 9 Components 10%
Material 23%
7.4 Direct Labour 44%
7.4 Indirect Labour
6.9 6.7 6.9 7.2 & Matl 44% Indirect Labour / Material 13%
15.3 Engines SG&A 10%
11.5 10.4 10.5 10.1 10.7 13.5
Material 23% Operating Profit 10%
Line Mtce TOTAL 100%
9.2 8.5 8.2 8.5 8.9 8 10.35
2001 2002 2003 2004 2005 2006 2007
source: oag, aerostrategy
20 ASIAN AIRLINES & AIRPORTS MAY / JUNE 2012 WWW.ASIANAIRLINES-AIRPORTS.COM