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Vital to keep aerospace sector alive during lockdown

Vital to keep aerospace sector alive during lockdown

22 Jun 2021

MRO services ensure maintenance works on aircraft to keep them airworthy when grounded

The country’s aerospace industry, which employs more than 21,000 skilled workers, cannot afford another shutdown in business as it risks losing the high value market to the regional competitors.

Malaysia Aerospace Industry Association president Naguib Mohd Nor said the entire supply chain, from components manufacturing to flight servicing, must remain in operations although at a lower capacity during the Full Movement Control Order (MCO).

Aerospace is one of 12 manufacturing sectors that was allowed to operate during the first phase total lockdown from June 1 to 14, despite some quarters saying manufacturing is not an essential service at a time where many carriers remain grounded.

“Despite flying rates still not up to pre Covid-19 levels, in many countries domestic travel is recovering. Malaysia is part of the global aerospace supply chain.

“There are only a handful of aircraft manufacturers producing aircraft for the world,” Naguib told The Malaysian Reserve.

The industry’s main concern is the MCO would be longer than anticipated should the number of Covid-19 cases fall to more manageable levels.

“Breaking the manufacturing and MRO (maintenance, repair and overhaul) supply chain would raise Malaysia’s risk rating as a destination for such skills and services.

“This would drive companies like Airbus SE or Boeing Co and their supply chain to seek for other places to invest in,” said Naguib.

“MRO services ensure maintenance works on aircraft to keep them air worthy when grounded. Although many aircraft are grounded, you cannot leave aircraft parked unmaintained,” he added.

Revenue from Malaysia’s aerospace industry shrank between 20% and 30% in 2020, compared to 2019’s revenue of RM16.22 billion as the aviation industry grind to a halt, as Covid-19 became a global pandemic and border restrictions were imposed.

Despite the lingering impact of the pandemic on the global economy, the government remains optimistic of achieving the targets of Malaysia Aerospace Industry Blueprint 2030 which aims to make the nation into a leading aerospace nation by the end of the decade with the local aerospace industry expected to generate an annual revenue of RM55.2 billion and create 32,000 jobs.

A total of RM15 million was allocated for the industry’s development programmes including the promotion of the Malaysian aerospace industry ecosystem, empowerment of the National Aerospace Centre of Excellence, competency enhancement through digital systems and IR4.0 and funding for the development of biobased aerospace materials.

“Surviving this crisis would put Malaysia in a very strong position post-pandemic to grow faster as the crisis would have forced a natural adjustment to the supply chain as companies in developed countries are challenged with high costs of operations and lack of cashflows,” Naguib said.

He added the country can become a hub for aircraft components manufacturing or repairs of components like engines and braking systems of aircraft flying across the world.

As major companies remodel their business, local company Global Systémes Asia Sdn Bhd (GSA) moved to acquire the MRO operations of RUAG International in Malaysia.

The move, the first for a Malaysian company in the MRO sector, is seen as able to increase and support the national agenda to make Malaysia a regional and global hub in the industry.

The deal significantly increases GSA’s MRO helicopter and aircraft capabilities and enhances the group’s service offering to include components, fuselage, starter generator and electrical systems servicing.

Source: The Malaysian Reserve