This article first appeared in The Edge Financial Daily on March 26, 2019

KUALA LUMPUR: French aircraft manufacturer Airbus, expecting Malaysia to remain a focal point in its supply chain, is looking to increase the value of its supply, source and maintenance, repair and overhaul (MRO) operations here to US$550 million (RM2.24 billion) a year by 2023, driven by robust demand for aircraft in the region.

Last year, its Malaysian operations were valued at US$400 million (RM1.62 billion), according to Airbus Asia Pacific president Jean-Marc Nasr at yesterday’s media briefing on the group’s business here. Nationwide, the group currently employs 4,000 people, and wants to raise the number to 5,200 in four years.

He said Asia-Pacific is seeing a higher passenger traffic growth, which is expected to boost demand for aircraft production and MRO services.

“We expect annual growth in passenger traffic of 5.5% a year in Asia-Pacific, compared with 4.4% worldwide. Asia-Pacific is growing faster than the rest of the world, hence why we’re seeing a growth,” said Nasr, adding the trend is expected to continue for 20 years.

This is why the group remains “100% committed to growing our presence in Malaysia, firmly believing the country’s aerospace industry’s potential to become one of the largest in the region”, according to Nasr.

Airbus Malaysia country head Raymond Lim, also the chief executive officer of Airbus’ wholly-owned MRO outfit — Sepang Aircraft Engineering Sdn Bhd — said the region’s estimated need of about 20,000 aircraft in 20 years, versus its current 7,000 aircraft, would boost MRO operations and drive demand for more skilled workers.

Lim also said the group is seeking to grow its helicopter MRO segment by conducting more complex MRO works via its helicopter unit here, Airbus Helicopters Malaysia Sdn Bhd. “We have made a significant investment in making Airbus Helicopters a complex repair centre for the region.”

He cited the group’s new helicopter completion and delivery centre here is set to open in May, and that the group is looking to produce 20 helicopters a year from the centre.

On the group’s order book, Airbus Asia Pacific head of communications Sean Lee said Airbus now has 727 aircraft orders in Malaysia, of which 278 planes have been delivered.

Of the total, AirAsia has ordered 592 aircraft, AirAsia X (96) and Malaysia Airlines (39). Of these, 219 units have been delivered to AirAsia, 20 to AirAsia X, and all 39 to Malaysia Airlines.

Malaysia is Airbus’ largest supply base in Southeast Asia, and the group’s fifth-largest supply base for composite parts globally, according to Nasr. At the Langkawi International Maritime and Aviation Exhibition from today to Saturday, Airbus will be the largest international exhibitor.