Indonesia is on the brink of a significant opportunity to become a center for Maintenance, Repair, and Overhaul (MRO) industry in the Asia Pacific region. With the aviation industry experiencing a resurgence following the Covid-19 pandemic, the demand for MRO services has increased significantly. However, the domestic MRO service capacity is still far from optimal, creating both challenges and opportunities for Indonesia’s aviation industry.
Rowin H. Mangkoesoebroto, Chairman of the Indonesia Aircraft Maintenance Service Association (IAMSA) for the 2018-2021 period, revealed that Indonesia serves as the operating base for over 50% of aircraft operating in 10 ASEAN countries. This indicates that domestic MRO capacity should be able to accommodate at least 50% of the total maintenance service needs for aircraft in the region.
“In fact, the current MRO capacity in Indonesia has not yet reached that figure. Regular maintenance of aircraft is not just a necessity but a responsibility mandated by aviation regulations,” Rowin told the AviaX team.
MRO Industry Segmentation and Capacity Challenges
The MRO industry in aviation is divided into two main segments. The upper segment includes narrow-body aircraft such as the Boeing 737 and Airbus A320 up to wide-body aircraft. Meanwhile, the lower segment covers small narrow-body aircraft down to the smallest aircraft, including helicopters.
Currently, Indonesia only has upper segment MRO services that can compete on a global scale. However, the lower segment still faces capacity limitations and relies on upper segment MRO facilities.
“Ideally, Indonesia should be able to independently develop MRO capabilities in both segments. Moreover, the available capacity should not only meet domestic needs but also attract foreign aircraft for maintenance in Indonesia. If this is achieved, the MRO industry could become a significant source of foreign exchange for the country,” explained Rowin.
Foreign Exchange Opportunities and Global Competitiveness
Globally, the MRO industry has significant potential to become a strategic economic pillar for Indonesia. Indonesia’s main competitive advantage is the more competitive MRO service costs compared to other countries in the region. By optimizing MRO capacity, Indonesia has the potential to reduce its dependence on overseas maintenance services, thereby preventing the outflow of foreign exchange.
“Currently, high-end MRO services have begun to meet the needs of the domestic aircraft fleet and have a strong international reputation. However, the lower segment still needs to develop further. Dependency of the lower segment on the upper segment actually reduces the capacity that should be used for large-body aircraft, both domestically and internationally,” said Rowin.
To maximize this potential, investments in infrastructure, workforce capacity enhancement, and strategic policies supporting the MRO industry are essential steps. If Indonesia can optimize MRO service capabilities across all segments, this industry can not only meet domestic needs but also attract more international airlines to conduct aircraft maintenance in Indonesia.
With the right vision and steps, the MRO business has the potential to become one of the most reliable and sustainable sources of foreign exchange for the country in the future.