MAS Aerospace Engineering, a wholly-owned subsidiary of Malaysia Airlines, will team up with Italy's aeronautical firm, Alenia Aeronavali to form a comprehensive aircraft maintenance and repair overhaul (MRO) joint venture company.

While they would market these services to other airlines at highly competitive costs in both the local and regional MRO markets, their partnership would provide a boost to the government's aggressive efforts to promote Subang as an aviation hub.

"We can leverage on our collective expertise to continue to offer a high level of safe and secure flight operations," MAS Aerospace Engineering (MAE)'s Managing Director, Mohd Roslan Ismail, said.

He said MAE is to be one of the major MRO providers in Asia.

Mohd Roslan said the facility in Subang, which mainly services the Fokker-50 aircraft, would be able to service the Avions de Transport Regional (ATR) aircraft by the year end with minimal investment comprising tooling and training as the hangar was already there.

As for efforts to enhance Subang as a major MRO hub in the Asia Pacific region, he said the potential was there given that 160 ATR aircraft had already been delivered and a further 272 ordered.

Subang was already among the top three MRO centres regionally. He said potential customers from India, Vietnam, Indonesia, the Philippines would find it cheaper to service their ATR in Subang rather than sending the aircraft back to Toulouse in France.

"We are also finalising the equity shareholding but MAE will be the major shareholder in the joint venture," he said. Meanwhile MAS executive director and chief financial officer Tengku Azmil Zahruddin said MAE, which turned in a revenue of RM350 million last year, hoped to chalk up considerably higher earnings when the ATR servicing operations come onstream fully. Both MAE and Alenia Aeronavali, a company within the Italian conglomerate Finmeccanica and controlled by Alenia Aeronautica, marked the formation of the joint venture with the signing of a memorandum of agreement (MoA) Thursday.

Mohd Roslan signed for MAE while Alenia was represented by its chief executive officer Gennaro Di Capua.

The MRO JV would support the future fleet of 15 ATR aircraft that would join two MAS subsidiaries, Firefly and MASwings, as well as other potential operators in the region during its first stage of operations.

The deal to supply 15 ATR aircraft to Firefly and MASwings was signed in January.

ATR are manufacturers of turboprop aircraft.

In the second stage, the joint venture would develop additional business opportunities in the cargo conversions and specialised activities.

Under the MoA, MAE would be the majority shareholder and fully supported by ATR.

Mohd Roslan and Alenia Aeronavali's Chief Executive Officer, Gennaro Di Capua signed the MoA at the Farnborough International Air Show outside London.

It was witnessed by Minister of Transport, Datuk Ong Tee Keat, Malaysia Airlines Chairman, Tan Sri Dr Munir Majid and Alenia Aeronauticas Chief Executive Officer, Giovanni Bertolone.

"This is a significant occasion for MAE, as Aeronavali has more than 50 years of experience in MRO jobs and is an experienced ATR service provider," Mohd Roslan said at the signing.

Di Capua, in his remarks, said the new JV would combine the efficiency and effectiveness of an experienced airline like MAS and the know-how of the Finmeccanica Groups companies in the MRO sector.

"We are sure that the new joint venture will produce outstanding results in the Malaysian and the regional MRO markets," said Di Capua.

Mohd Roslan said large percentage of the new aircraft deliveries will go to Asia in general, and Southeast Asia in particular, and "we want to capitalise on this".

Alenia Aeronautica is the largest Italian aeronautic player which operates world-wide in the commercial and military aviation, unmanned aerial vehicles and aerostructures.

Alenia Aeronautica also coordinates the activities of Alenia Aermacchi and Alenia Aeronavali - wholly owned companies - respectively active in the design and manufacturing of military trainer aircraft and in the overhaul, maintenance and modification of military and civil aircraft.

Alenia Aeronavali is active in the field of the maintenance and modification of military and commercial airplanes, specifically, in the cargo modification.

It works in the maritime patrol version of the ATR and has developed the freighter conversion of the ATR 42/72, along with its mother company Alenia Aeronautica, which, among other things, is deeply involved in the manufacturing of the fuselage of the aircraft within the Gie ATR.

So far, in addition to performance by Alenia Aeronavali of the continuous maintenance support to ATR operators and Gie ATR, eight ATR aircrafts have been modified with the installation of a large cargo door.

With its joint ventures ATR and SuperJet International, Alenia Aeronautica is the world leader in the regional turboprop market and a top player in the regional jet sector.

MAE started as Malaysia Airlines Engineering and Maintenance division in 1972 and has over 35 years of experience in the MRO field.

With advanced heavy maintenance facilities and six fully equipped hangars at the KL International Airport and its headoffice in Subang, it manages MAS' aircraft fleet that includes B747-400, B777-200, A330-200/300, B737-400.

It also provides MRO support for the Fokker 50 and Twin Otter aircraft in its subsidiary companies, MASwings and Firefly.