October 28, 2013
Credit: Lion Technic
Indonesia's Lion Air is moving closer to completing the first phase of its new maintenance, repair and overhaul facility in Batam, which will help it handle the massive number of aircraft deliveries the carrier has scheduled and make it a player in the third-party MRO market.
The first two of the planned four hangars are scheduled to open by the end of the year on Batam, an Indonesian island just south of Singapore. These two larger hangars will quadruple Lion Air's MRO capacity, which is currently provided by its single-hangar operation in Surabaya, Indonesia's second-largest city.
Lion Technic President Romdani Adali Adang tells Aviation Week that without this new facility, the rate of aircraft deliveries would overwhelm the current capacity by next year. So far, Lion has been able to boost the use of the Surabaya facility through shift increases and efficiency improvements, but this will soon not be enough. The carrier has taken delivery of 19 Boeing 737s this year, and is due to receive another five by year-end. It has outstanding orders for almost 550 narrowbodies from Boeing and Airbus.
The new hangars will each be able to accommodate three 737s or one 747-400, compared to the two-narrowbody capacity of the Surabaya hangar. All four of the hangars are due to be finished by the end of June next year. Engine and component repair facilities are also planned for the site. The total cost is estimated at $250 million.
When all these facilities are fully established, they will require an additional 2,000 workers, of which 1,400 will be involved with the engine and component shops. These new Batam employees would almost double Lion Technic's current workforce, which now stands at 2,500.
Lion also intends to open a third MRO facility in Manado, in the eastern part of Indonesia. This would be a single-hangar operation, able to handle turboprops and narrowbodies. Construction is due to begin next year.
The location of the Batam site offers some significant advantages over Surabaya, says Romdani. The existing facility is situated within a naval base, making employee access somewhat complicated. The Batam facility will not be faced with this issue, and also has more land available for growth.