Sepang Aerospace Engineering, AIROD and also
Airbus Helicopters.
Another key step is to expand geographically
and into higher value-added services that can
allow the nation to offer “nose to tail” services and
give better turnaround time. Action that should be
taken by Malaysia is to capitalize on the presence
of foreign companies where local companies can
collaborate and strengthen their services offering.
Air traffic in the Southeast Asia region has grown
significantly with the increase in the number of
low-cost flights. This should be an eye-opener for
the MRO industry players in Malaysia to take this
opportunity to equip and position themselves as
they grow to meet future needs especially in the
components and modifications market segments.
The MRO market segment in Malaysia
has contributed the majority share of the
aerospace industry revenue followed by the aero-
manufacturing sector. Within the Asia-Pacific
itself, the MRO market segments for Engines and
Components has been dominating the 3 rd party
MRO market. This is due to the airlines tending to
retain the work for line and heavy maintenance
in-house. Hence more effort should be done to
increase the Engines and Components MRO so
that it can provide for future needs of the airlines
since it is expected that by year 2031, Asia-Pacific
will be the biggest airline market in the world.
Figure 5 shows the Malaysia’s trade performance
in aerospace manufacturing and manufacturing
revenue is shown by the blue column. (Source:
MATRADE)
Currently, Malaysia is second behind Singapore
in Southeast Asia for MRO. It can be seen that
most regional players are racing to capture new
business as new markets emerge. Therefore
Malaysia’s MRO companies need to be highly
competitive to meet airlines’ needs, and overall
increased capacity due to a larger numbers of
aircraft owned by national carriers and LCCs.
Aerospace Manufacturing
Aerospace manufacturing in Malaysia is a rapidly
developing sub-sector and has already overtaken
other sub-sectors in the past few years. The
main manufacturing activities are engineering
and design, avionics, engine part manufacturing,
aero-structure development as well as airframe
equipment. According to Malaysia’s trade
performance in aerospace manufacturing from
2009 until 2016 shown in Figure 5, 2016 marks
the highest level of revenue generated though
export activities in the decade at RM 5.53 billion
an increase of 32.6% compared with 2015.
Foreign investment by OEM companies as well
as Tier 1 aerospace manufacturing companies
are the main contributors to this rapid growth in
the manufacturing market. With the help of tax
exemptions and other beneficial aspects as stated
in the 1997 Blueprint for Malaysia, OEMs and Tier
1 companies expanded their business in Malaysia
with high levels of profitability. Avionics and aero-
structure manufacturing achieved consistent
revenue growth during these years. Aero engine
part and component manufacturing are predicted
to grow further in the next few years.
Top tier manufacturing companies in