SHAH ALAM: IT appears that we will soon have two Hercules MROs operating in the country, if the Finance Ministry has its way. The first one, Airod Sdn Bhd – partly owned by the government while the other – if it happens – will be a subsidiary of a GLC.
By having two MROs, we can bring down the cost of maintenance for the 14 Hercules operated by the RMAF. Cost savings, if it happens, is likely to be the only benefit from having two MROs for a small number of aircraft type.
If indeed the second Hercules MRO is stood up, we will be joining the ranks of Australia by having two aviation firms competing for the same market. The two Aussie firms involved in Hercules MRO are Northrop Grumman Australia and Airbus Group.
The second Hercules MRO in Malaysia could be set up as early as next year once the winner of the restricted tender for the Hercules upgrade is announced. Industry sources told Malaysian Defence that the Finance Ministry is to call for the restricted tender this month, to select the company to conduct the Hercules upgrade which had been stalled for sometime now.
From a previous Malaysian Defence story on the Hercules Upgrade.
Airod was awarded a letter of intent at DSA 2014 for the upgrade of the avionics and communications systems aboard the RMAF’s fleet of 14 Hercules to meet international aviation traffic standards. The work is to be done with Canada’s Esterline-CMC which was selected by the government for the programme.
However, the work had yet to start as the contract had not been signed as Airod seek to work with Rockwell Collins, its long time partner. Industry sources told Malaysian Defence that the government was adamant though that the project be carried out with Esterline. I believed that the government chose Esterline as part of the deal which allowed Petronas to buy a shale gas field in Canada in 2014.
Industry sources said many companies are lobbying to be invited as it is likely that the company that win the upgrade contract will also take-over the Hercules MRO contract. And it is not compulsory that the company that win the upgrade deal be an aviation company like what happened in 2014.
Whoever wins it could always passed along the contract either to Airod or another MRO like the subsidiary of the GLC. That said the subsidiary of the GLC is said to be the favourite this time around. So what will happen if Airod is not selected for the upgrade and MRO contracts then?
It will continue as usual of course. It may have to withdraw its personnel from Labuan where it conducts maintenance for the 14th Squadron. It may have to seek more contracts from overseas like it did with the US Navy. Airod already have various contracts from other air forces as far away as Africa and Middle East though the RMAF contract gave it prestige and legitimacy.
From the US Embassy in Malaysia webpage.
Malaysian aerospace firm Aircraft Inspection, Repair & Overhaul Depot Sdn Bhd (AIROD) has completed repairs on the first U.S. KC-130J aircraft under contract in support of the U.S. Marine Corps Transport Refueler Squadron based in Japan. AIROD delivered the aircraft to the Marine Corps at a ceremony located at Subang Airport on Thursday, August 4, 2016.
The U.S. Navy’s Fleet Logistics Center Yokosuka signed a five-year, $25-million contract with Malaysian aerospace firm AIROD on June 29, 2015. The contract employs approximately 25 engineers and technicians to service thirteen KC-130J aircraft.
Will it be wierd to say the least if Airod, originally set up to service RMAF aircraft, has to rely on foreign contracts to stay afloat?
As I like to say, The More, the Merrier.
— Malaysian Defence
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The new startup, will not have an authorised Lockheed martin mro status, unlike airod. So airod will still have mro business with those wanting an official Lockheed mro station.
‘By having two MROs, we can bring down the cost of maintenance for the 14 Hercules operated by the RMAF.’
sorry for asking…can i know how by having 2 MRO it can bring down the cost?? and is this a good news??
Reply
Good news as RMAF will get its Hercules upgraded. The cost of maintenance should go down as the companies will have to compete with each other to get the contract. That is the theory of course.
The last i know of airod’s financial performance was in 2010..during that time it was still bleeding money up to a tune of rm20 mil loss a year and not expected to make any profit for a foreseable future..not sure how additional competition will affect its future
There is a danger in all this.
With anything, it takes a critical mass to keep skills up. Now, the risk it instead of one good, efficient operator, you have two half assed ones.
Several points to make
1- Airod has been involved in MRO business for 40 years
2- It is one of the few (2, to be exact) companies that is certified by Lockheed-Martin to do MRO on C-130
The new company (most probably ctrm, based on earlier reports from nst) would be hard pressed to replicate the same workmanship as Airod did.
It’s possible as shown by philippines air force (which have done in house MRO on their hercs instead of sending them to Airod) but rhey still need someone from LM to certify the process
Could simply be the national interest flavour of the month. That’s why we have so many suppliers and different weapons systems right?
It is ironic that we call them “national interests” when they are more accurately enemies of the people.
Dundun,
PAF C-130s have been worked on by AIROD.
In the past, yes. However quite recently, they have undertook on overhauling an old herc, like what PAF 410th maintenance wing did to C-130B with tail number #3633
Of cource, certification will still come from LM personnel since they are not authorized to self cert.
Right now PAF is planning on overhauling more of C-130s (and possibly L-100s) from their own boneyard, where aircraft were let to rot due to lack of funding post marcos era
AIROD to be blamed if they lost the contract.They should have the flexibility to collaborate with any foreign parties including Esterline CMC.
Reply
It’s not Esterline that they are not keen its the local agent.
Cannot undestand why local agent is the stumbling block.Local agent has limited power should Airod collaborates with Esterline.Local agent helps with local liason, arrange meetings, look after Esteeline’s staff …etc….etc. Local agent does not normally involve in the formulation, negotiation and conclusion of contract which in this case should be between Mindef, Airod and Esterline.Local agent gets paid direct from Esterline based on the agreed commission which could be between 4-6%.
Just my take.
As Airod is the certified center for OEM (Lockheed Martin) then it become difficult for them to work with independent companies, whih Easterline is, as it may become conflict of interest. Even if the OEM may sanctioned the work but I believe the local agent will be impacted.
“agreed commission which could be between 4-6%”….. mmmm that is a bit too low … I dare say
AIROD having no problem collaborating with Indonesian air force maintenance crew
Years ago before the MKMs were delivered it was announced that a new company would be formed to perform depot level maintenance. That never happened but I’m unsure who performs depot level maintenance on the MKMs : ATSC or AIROD?
Reply
Its ATSC which is partly owned by Airod.
TomTom,
There is never “one good”.
dundun,
1/Most of the 40 years history is not to be spoken.
2/So what?
3/MIAT and gang jv is technically ahead of CTRM, politically is another story.
4/There is no workmanship so to speak.
Loreng,
Most of the time, OEM have no idea why there is a clown between their customer. But most important is, this clown knows the person that signs the cheque. Get it?
Mirsy,
Getting a LM franchise has nothing to do with working with component OEM.
I think it will be great if Airod can earn and survive on foreign contracts and not just rely on RMAF. It reflects well on Airod’s competency and reputation, internationally. Of course it also means Airod has to work harder but again, that is something positive.