BATAM EXPECTED TO SERVE AS AIRCRAFT REPAIR CENTER

By Andi Abdussalam

Jakarta, June 7 (Antara) - Batam, a tiny island being developed into an industrial area near Singapore, is expected to serve as a wide-bodied aircraft maintenance, repair and overhaul (MRO) center for at least three groups of aircraft maintenance companies.          The three groups of airline maintenance firms which are to provide aircraft maintenance services in Batam are PT Garuda Maintenance Facilities (GMF) AeroAsia, the Lion Group and PT Indonesia Aero Maintenance (IAM).          "We hope that Batam will become a center of maintenance for wide-bodied airplanes,"  President Director of PT Garuda Maintenance Facilities AeroAsia Richard Budihardianto said when signing a memorandum of understanding with Head of the Batam Free Trade Zone Authority Mustofa Widjaya in Batam on Friday.          PT Garuda Maintenance Facility (GMF) AeroAsia will focus its wide-bodied aircraft maintenance in Batam. PT GMF has decided to choose Batam because of its strategic location as one of the country's gate near Singapore.          According to Head of Batam Free Trade Zone Authority Mustofa Widjaya, Batam will provide facilities for investors operating MRO business on the island.          "Batam is a free trade and free port zone. It is free from import duties. All goods are exempted from value added tax of luxury goods," he said.            The Batam location, which is near Singapore, is also expected to make it easy for industries to operate  MPO in Batam. "The logistics needs is also expected to arrive faster because it is near Singapore," he said.          In the meantime, Commercial Section Head for Batam's Hang Nadim airport Dendy Gustinandar said that Hang Nadim airport was ready to assist MRO companies in Batam to win the market in Indonesia. "This is done so that they would not move their businesses to overseas," Dendy said.          Based on the MoU, PT Garuda Indonesia will set up a maintenance facility at around Hang Nadim International Airport.          "Initially Garuda is studying to set up the Garuda Maintenance Facility at Kuala Namo International Airport in North Sumatra but finally it chooses Hang Nadim," Batam Free Trade Zone Authority (BP Batam) spokesman Ilham Eka said.          He said they (Garuda) need 48 hectares of land for the facility but initially they would only develop 15 hectares of it and they would need 400 to 600 workers.          Ilham said that Hang Nadim international airport on Batam Island located about 20 kilometers south of Singapore has a 4,025 kilometer long runway. This is what has probably made aircraft maintenance companies to decide to set up the facilities there, he said.          "Its free trade zone status is also a supporting factor for companies wishing to develop industries in Batam," he said.          With Garuda's presence, Hang Nadim would have three aircraft maintenance facilities namely the GMF, and the MROs belonging to Lion Group and PT Indonesia Aero Maintenance (IAM).          Lion Group and PT Indonesia Aero Maintenance (IAM) also have signed a cooperation agreement for the construction of maintenance facility at Hang Nadim Airport, Ilham Eka said.          Lion Group, he said, has already started its first phase development project on a four-hectare land while IAM plans to start the development in September.          PT IAM which is still handling administrative requirements is expected to start the construction of such a facility next September.          In addition, PT IAM will also build an aviation school to support the aviation industry, he said.          With the three aircraft maintenance facility companies taking part in the development of MRO facilities in Batam, the island is now running short of locations for the development of additional MRO facility.          "No more facilities will likely be added as the land allocated for them totaling 150 hectares has been used up by the three companies," Ilham said.          The same thing was also voiced by Commercial Section Head for Batam's Hang Nadim airport Dendy Gustinandar  who said his side had run out of spaces for MRO facility locations.          "All plots of land for MRO facilities have been allocated to three MRO companies in Batam. Besides the GMF, there are also MROs belonging to the Lion and IAM groups," he said.          The development of aircraft maintenance facilities in Batam is an answer to the need for reliable and competitive aircraft maintenance at a location not far from the operation areas.          In the meantime, President Director of  PT GMF AeroAsia Richard Budihadianto said that his company was planning to build the MRO facility around Hang Nadim airport.          The development and time of operation are still under the deliberation of a team from both sides.          Richard said that the development of GMF's MRO facility was expected to spend a fund of about US$75 million to US$100 million.          Currently, Garuda has five MRO throughout the country, namely in Kuala Namu, Makassar, Jakarta and Bali.          Richard said that foreign companies still control about 70 percent of aircraft maintenance, repair and overhaul (MRO) industry in Indonesia.          He said that of the US$900 million MRO market in Indonesia, only 30 percent were operated by Indonesian companies. And of the 30 percent, about 70 percent were operated by PT GMF Aero-Asia.          Richard predicted that the MRO industry market in Indonesia would continue to develop and reach US$2 billion in 2015. In order to win the market, GMF AeroAsia continued to develop the industry and open new MRO facilities in a number of locations in Indonesia to expand its market.          Besides developing MRO industry in the country, GMF AeroAsia also expand services to the world market. The MRO market of GMF overseas reached US$60 million, he said.***3*** (T.A014/b003/B003) (T.SYS/A/A. Abdussalam/Bustanuddin) 07-06-2013 17: