ADE Aims to Double MRO Hangar Lines to 40 Within Five Years
Asia Digital Engineering Sdn Bhd (ADE), the specialized maintenance, repair, and overhaul (MRO) arm of Capital A, is strategically targeting a significant capacity expansion, planning to double its MRO hangar lines to a total of 40 within the next three to five years, signaling ambitious growth.
Chief Executive Officer Mahesh Kumar stated that ADE is currently operating 16 hangar lines but plans to add four more lines by the close of the year, before proceeding with the expansion of an additional 20 lines to successfully reach the total of 40.
Kumar noted that, at present, a substantial 90 per cent of ADE’s total revenue is derived from its parent group, AirAsia, with only 10 per cent coming from external, non-AirAsia clients.
He provided a clear breakdown of the current business split: “Right now, we are doing about 90 per cent AirAsia and 10 per cent non-AirAsia. Even for AirAsia, we are only capturing about 70 per cent of its business.”
Kumar stressed that maintaining this 70 per cent capture rate with AirAsia is a decent number to sustain the current 90-10 ratio.
The company’s immediate internal goal is to reach 100 per cent capture of AirAsia’s MRO business, a target they aim to achieve within the next two years.
However, this internal focus must be balanced against the growing needs of the parent company, as the AirAsia Group is already operating roughly 250 aircraft and is projected to expand its fleet to 300 planes over the next five years.
Kumar emphasized the necessity for ADE to scale up rapidly to keep pace with AirAsia’s accelerated fleet growth and its corresponding maintenance requirements, ensuring internal support capacity remains robust.
Strategic Partnerships and External Revenue Goals for ADE
The strategic expansion of ADE’s hangar lines is closely linked to its pursuit of external revenue growth and its recent forging of major long-term agreements with global industry leaders like Air France and Air France Industries KLM Engineering & Maintenance (AFI KLM E&M).
During a press conference following the formal signing ceremony for these two key agreements, it was revealed that ADE will be tasked with providing Air France with heavy maintenance and aircraft modification services, a significant endorsement of its capabilities on the international stage.
In a reciprocal arrangement, Air France Industries KLM Engineering & Maintenance will provide essential maintenance service support to the AirAsia Group’s new A321neo fleet, leveraging their specialized expertise for this modern aircraft type.
These partnerships are a vital step in diversifying ADE’s revenue and achieving its ultimate business target of shifting its current ratio to a more balanced 70:30 split, where 70 per cent of its business is still AirAsia-related, but 30 per cent is successfully derived from non-AirAsia clients.
Kumar conceded that despite the long-term goal for external revenue, “But the low-hanging fruit is still capturing AirAsia’s business first,” indicating that consolidating internal MRO work remains the most immediate and efficient path to growth.
The strategic partnerships not only expand the company’s client base but also expose ADE to best-in-class MRO practices and international standards, which are crucial for future competitiveness in the global market.
Internal Consolidation and Component Workshop Development
To further strengthen its service offerings and prepare for the targeted 70:30 revenue split, ADE is actively focusing on fully capturing AirAsia’s remaining MRO business while also collaborating with original equipment manufacturers (OEMs) to establish localized component workshops in Malaysia.
The immediate priority for ADE remains the consolidation of the outstanding 30 per cent of AirAsia’s MRO business that is currently being outsourced to other service providers.
By bringing this work fully in-house, ADE can maximize efficiency and control costs for its parent company while simultaneously building up the internal expertise and workload necessary to sustain the planned 40 hangar lines.
This consolidation is a necessary precursor to aggressively pursuing the 30 per cent non-AirAsia business target.
In addition to expanding its hangar capacity, Kumar mentioned that ADE is also strategically working with various original equipment manufacturers to establish specialized component workshops within Malaysia.
These workshops are crucial because they allow the MRO arm to perform deep-level component repair and overhaul services, which are typically high-value and often outsourced.
By localizing these component repair capabilities, ADE will be able to offer a more comprehensive and vertically integrated range of MRO services, making it a far more attractive and cost-effective provider for both the AirAsia fleet and prospective non-AirAsia clients across the region.
This strategic focus on component work and hangar expansion reinforces ADE’s long-term vision to evolve from a captive MRO unit into a major regional player in the competitive MRO industry.
