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Qantas has signed a joint venture agreement with a subsidiary of Malaysian Airlines, MAS Aerospace Engineering (MAE), to establish a company to provide airframe maintenance services from Malaysia.
Qantas chief executive Geoff Dixon said the company would target the rapidly growing Asia-Pacific maintenance, repair and overhaul (MRO) market, which is expected to reach US$15 billion ($20.13 billion) in sales by 2016.
Mr Dixon said the company would perform overflow airframe maintenance for Qantas and its subsidiary airlines.
Mr Dixon said Qantas had for many years contracted overflow engineering work to a variety of MROs in Asian countries.
"The operation in Malaysia will provide the opportunity to consolidate some of this work, while providing further growth for the Qantas group," he said.
Mr Dixon said he was confident the joint venture would create a world class and cost competitive MRO.
"Qantas engineering will have a significant input into the management, engineering and quality system of the new company, which will commence operations in 2008.".
Mr Dixon said the venture built on the A$300 million ($345.14 million) investment Qantas had previously announced for its Australian engineering operations.
"This venture also reflects the Qantas group's objectives of growing our aviation-related businesses into growth markets in Asia and the Pacific," he said.
Malaysia Airlines chief executive and managing director Idris Jala said MAE is "well positioned to build a world class aviation MRO joint venture with Qantas".
"Our priority will be to develop Kuala Lumpur as a hub for the Asia Pacific region for MRO services," he said.
"Malaysia Airlines is already the leading civil MRO provider in Malaysia and this will further cement our position in the region."
- AAP
