Capital A’s ADE expects to double revenue with new KLIA hangar facility

KUALA LUMPUR (March 24): Asia Digital Engineering (ADE) is well positioned for substantial growth in the coming years as plans are underway to establish a new maintenance, repair and overhaul (MRO) hangar facility at the Kuala Lumpur International Airport (KLIA), its chief executive officer (CEO) Mahesh Kumar said.

ADE is the engineering and maintenance subsidiary of Capital A Bhd (Capital A).

Mahesh expressed his confidence that revenue will double by 2025 and notch progressive growth thereafter.

The new hangar facility, spanning 8.19 hectares, is being constructed in two phases, with phase one slated for completion in May 2024 and operational by August, while phase two will follow swiftly, with operational readiness anticipated by October this year.

Mahesh Kumar revealed that the hangar facility will also see phase three coming up once phase two is completed, and the company has first refusal with Malaysia Airports Holdings Bhd for a 2.07-hectare piece of land near the facility in KLIA.

“The soil testing work has begun (for phase 3), and we are planning to start construction once the second phase is ready, expecting completion by the end of 2026,” he told Bernama.

Mahesh said phase three of the hangar facility will accommodate another four lines of narrow-body aircraft.

New hangar facility will be a game changer

Upon the completion of phases one and two, the hangar facility will make ADE the largest (MRO) service provider in Malaysia and one of the largest in the region.

Mahesh further stated that the new hangar facility would provide flexibility for ADE to service wide-body aircraft such as A330 and B737.

Designed in an ‘L’ or boomerang shape, the facility would allow for maximum land use and more hangar lines.

It consists of two main sections, Hangar A (phase one), which can accommodate both narrow-body and wide-body aircraft, while Hangar 2 (phase two) is designed exclusively for narrow-body aircraft.

The facility could house 14 narrow-body aircraft or a combination of eight narrow-body and two wide-body aircraft simultaneously.

“A new taxiway will be constructed to facilitate aircraft movement to and from the hangar,” he said.

Mahesh added that the US$100 million (RM473.5 million) investment secured from OCP Asia Ltd last year to construct and operate the new hangar would also be sufficient to construct phase three.

Currently, ADE has a four-line hangar in Subang, a two-line hangar in Senai, Johor Bahru and a one-line maintenance facility in KLIA.

Expansion plans on the way

Mahesh said the company is eyeing line maintenance operations in the Philippines, Indonesia, Cambodia and Thailand.

He said operations in the Philippines and Cambodia are expected to begin by the first half of 2024, and Indonesia and Thailand in the second half of the year.

The CEO added that ADE had obtained approvals from the respective aviation authority’s approval to service aircraft from Thailand, the Philippines, Cambodia, Nepal and Indonesia, and is eyeing approvals from more countries in an effort to expand its operations.

Mahesh said obtaining the European Union Aviation Safety Agency (EASA) Part 145 Approval last November was the biggest assurance in bringing the business to greater heights.

“With the EASA approval, we look towards servicing more foreign countries.

“Although the new hangar facility is not completed yet, the slots are fully booked for the end of this year.

“So, the earliest we can look to dive into the foreign market would be next year,” he said.

On Dec 7, 2023, ADE recorded its 100th ‘C-Check’, a comprehensive maintenance inspection, under two and a half years, a record time frame since inception in September 2020.

Potential for Bursa Malaysia listing

Meanwhile, Mahesh said there is a potential for ADE to be listed in Bursa Malaysia in the future.

“Definitely, we aspire to get ADE listed. You know, but you never say no,” he said without mentioning a timeframe for the listing.

He also opined that the new hangar facility would likely speed up the potential listing process as revenue would grow once ADE commences operations at KLIA.

“In terms of listing plan, Capital A has various businesses under its portfolio that have listing potential.

“The group would have to balance the priorities between each business’s growth strategies and funding and evaluate the right listing timing to maximise shareholder value. So, let’s see where it goes,” he added.

ADE gears into digital transformation

As digitalisation becomes key to business sustainability, Mahesh said ADE is also gearing up for a revolutionary transformation and shift towards automation in the new hangar facility.

In the competitive landscape of airline operations, Mahesh pointed out that MRO services play a critical role in ensuring aircraft reliability and operational efficiency, demanding two fundamental requirements from MRO providers — the lowest cost and the fastest turnaround time.

“How do you want to achieve that? There’s no other way. You have got to go digital. You’ve got to automate a lot of processes but, of course, safety and standards are governed by the authorities, while keeping things as simple as possible without jeopardising the safety and airworthiness of the aircraft,” he emphasised.

Mahesh also said ADE has developed its homegrown predictive and preventive solution, Elevade Fleet, which is 100% live for AirAsia’s fleet.

He said the system offers predictive and preventative maintenance capabilities, advanced analytics, fleet tracking and cabin monitoring while simplifying monitoring and providing real-time solutions for aircraft health.

“Right now, it is on trial with several airlines as well,” Mahesh said.

He also said ADE had developed Aerotrade, the first-of-its-kind aviation marketplace in Asia, rapidly establishing itself as a game-changer in aviation procurement.

Mahesh said the platform attracted over 150 airlines, MROs, distributors, original equipment manufacturers, agents and stockists worldwide, with over US$244 million worth of inventory dedicated to Airbus and Boeing aircraft types.

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