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8/14/2019 asia pacific outlook.pdf
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Oleh : DATO' SRI MOHD NAJIB BIN TUN HAJI ABDUL RAZAKPERDANA MENTERI MALAYSIA
Tempat : Sepang Aircraft Engineering Sdn Bhd (SAE), Lot PT16 Jln KLIA S7,Southern Support Zone, KLIA
Tarikh : 02/10/2013
Tajuk : MAJLIS PERASMIAN 'SEPANG AIRCRAFT ENGINEERING SDN BHD
(A REGIONAL MAINTENANCE, REPAIRS AND OVERHAUL CENTRE
FOR AIRBUS AIRCRAFT')
Ladies and gentlemen,
Assalamualaikum Warahmatullahi Wabarakatuh and a very good afternoon.
1. First of all, allow me to express my gratitude to Sepang Aircraft Engineering, EADS andAirbus for inviting me to this momentous occasion. I am indeed very happy to be here to
officially mark the expansion of SAE Regional MRO Centre and the ' launch of Airbus
new Customer Services Centre in SAE offering specialized Engineering solutions forairlines'. I regard this as another milestone in the development of the aviation industry in
Malaysia, and a commendable step forward for the Malaysian industry.
Ladies and Gentlemen,
2. Air transport changed the landscape of our economy and society. Its contribution goes farbeyond direct economic effects. It promotes international trade, tourism and stimulates
investment throughout the globalized world. It is a major driver for economic and social
development, it has in fact made the world much smaller. Today the aviation industrycontinues to be resilient in spite of huge challenges from all around. Despite economic
uncertainties and crisis in many parts of the world, the industry has grown just over 50%
since the year 2000.
3. It is said that if aviation was a country, it would rank 19th
in terms of GDP. The annual
growth rate in air traffic is forecast to be about 4.7%. The driver for air traffic growth is
economic growth. Increasing urbanization will also drive economic growth and the propensity tofly. Another key driver is the growth in middle classes. Today, 30% of the world can be
classified as middle class, with forcasts suggesting that will be 60% by 2031.
4. The outlook is indeed most promising, especially for this part of the world. Industry
experts predict that Asia Pacific will lead in world traffic volume by 2031 accounting for 32% ofglobal traffic. This is on the back of a burgeoning middle class in the region which, in the same
time period is expected to grow by 5 fold.
5. Inevitably, airlines will require more aircraft, and ones with greater sophistication, energy
efficiency and comfort to boot. The demand would appear to be insatiable. By 2030, the
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passenger fleets will very likely double, and as I understand it, Airbus believes that of these 30%
will be replacement aircraft and about 60% will reflect growth and expansion.
6. In tangent with this, the demand for MRO services will indubitably increase. Even now,
good MRO services are highly sought after. There are 80,000 jet-powered aircraft in the civil
aviation market. Easily one third of this is operating in the air transport market, and a third ofthat in the Asia Pacific region. In Malaysia alone, we have three major airlines flying on average
about 2500 to 4500 hours per annum per aircraft.
7. It is no surprise therefore that he global civil aviation MRO business is estimated to be
worth over USD 65 billion. Today, North America holds 35% of the market share, Western
Europe 26% and the Asia Pacific 17%. By 2020, the Asia Pacific is forecast to command a
whopping 30% share. Consequently, growth in the Asia Pacific in MRO is forecast to be morethan 6% per annum. Hence the center of MRO activity will be moving in our direction.
8. The market as you know contains four distinct segments: heavy airframe maintenance,
line maintenance, engine and component. In Malaysia, heavy maintenance is undertaken bycompanies like SAE, line maintenance by MAS and AirAsia respectively, engine overhaul by
GE and component by MTU.
9. The heavy maintenance accounts for about 20% of the MRO revenue with heavy
emphasis on labour. Labour represents about 70% of the typical cost, whereas materials make upanother 30%. Every Ringgit spent on heavy aircraft maintenance generates about 40% economic
activity for the country. Hence it is an important segment for job creation in Malaysia. It is for
this reason that the Malaysian Government stands ready to support the growth of this industrywith a view of seeing the participation of more Malaysians in this highly specialized field.
10. Today, Malaysia is among the leading three countries in the Asia Pacific for MROservices. We have been able to stay competitive because of the sheer volume of business in this
region coupled with our advantage of an early foray into the sector, and an edge in quality human
capital at far more competitive rates. Our superior cost position is powerfully attractive toairline customers.
11. Malaysia has thus identified the MRO business as one of the sectors in the BusinessServices Entry National Key Economic Areas (NKEA). The NKEA represents an important
catalyst for our development toward a high-income nation status in 2020. The MRO sector is
projected to grow by 10% annually and new projects are expected to create 20,000 jobs in the
country. This year our Entry Point Projects (EPP) target RM 380 million in revenue from fleettechnical management and RM 2.4 billion from airframe MRO.
12. Several initiatives are already underway to develop the MRO ecosystem. There is thegreater development of Malaysias airport infrastructure, the availability of land and the creation
of a more conducive operating environment through improved tax and civil aviation regulations.
These, we are confident, will continue to make Malaysia a preferred MRO destination.
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13. However even as we speak, we are ever mindful of the changing landscape of the
industry. There is more involvement of OEMs. Aircraft manufacturers are more involved in
supporting their aircraft after delivery. The trend of airlines asking for aftermarket services willincrease. The OEMs have the intellectual property to be able to drive a high reliability rate and
be accountable for achieving them. The continued investment in facilities, the focus on process
innovations, technology breakthroughs and training are ever pressing to ensure competitiveness.There is also the persistent issue of whether the industry can produce enough skilled personnel tomeet mounting MRO requirements. Full training and certification for an aircraft technician takes
between 5-8 years and the pipeline of trainees is simply not enough to meet future demand.
14. In respect of the changing landscape, having Airbus onboard as a partner in SAE is
definitely a good strategic fit to stay relevant and on the cutting edge of a very competitive
industry. The partnership brings in new technology and innovative processes and at the sametime develops the local talent pool. I am especially pleased and excited to see this kind of
entrepreneurial spirit and partnership that makes Malaysia progressive.
15. Since 2008, the company has grown steadily to support both local and internationalcustomers. In 2012, SAE has secured EASA 145 certification, creating a potential to establish a
regional presence. I understand it has already completed A380 wing ribbed modification forSingapore Airlines and Korean Airlines. It is serving regional airlines such as Myanmar Air,
Mandala, Tiger Airways, Asian Wings Airlines, to name a few. I am certain SAE will continue
to implement the highest standards in its service delivery.
16. I am certainly pleased to see the commitment that Airbus is making to develop its
presence in Malaysia. SAE will be able to offer world class maintenance services to airlines from
across the region and beyond, while the new Airbus Customer Services facility will put Malaysiaon the international map as a centre for specialised aerospace engineering services. Both of these
initiatives will significantly enhance our position in this high value business and it will alsoprovide further proof that Malaysia is a major player in the MRO business in the region. It is myfervent hope that SAEs entrepreneurial spirit will become a role model for others in Malaysia
and that EADS and Airbus will pursue their Smart partnership and investment Policy with the
local industry, towards making Malaysia as a fully recognized, mature Aerospace and MRO Hub
regionally.
Ladies and gentlemen,
17. With the development of our own MRO capability, I would encourage our airlines to
look no further than Malaysia for the full suite of maintenance, repair and overhaul. Thepotential of the MRO business is huge and growing. It is an important catalyst in Malaysias
development towards high-income nation status. The aspiration is to capture 5% of the world
market share of the MRO business. Thus the Government will be most supportive of any efforts
to partake in this journey.
18. I congratulate SAE first and foremost on its entrepreneur spirit, and successes. I look
forward to see you grow from strength to strength and to continue to make Malaysia proud.
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Thank you for inviting me today to celebrate this special occasion and I wish SAE, EADS and
Airbus a very good journey forward.