January 17, 2019 / 2:48 AM / a year ago

Garuda Indonesia, Lion Air to explore joint ventures for aircraft maintenance -document

JAKARTA (Reuters) - The engineering arms of Indonesia’s two largest airlines, Garuda Indonesia (GIAA.JK) and Lion Air, have agreed to explore setting up joint ventures to maintain aircraft, engines, components and tire retread, showed a document seen by Reuters.

The agreement between Garuda’s GMF AeroAsia (GMFI.JK) and Lion’s Batam Aero Technic, due to be formally signed on Thursday evening, brings together the two rivals in an effort to jointly develop the aircraft maintenance, repair and overhaul (MRO) industry in the region, the document showed.

GMF AeroAsia and Batam Aero Technic service their respective airlines but also look to compete for business from third parties against regional rivals like Singapore Technologies Engineering Ltd (STEG.SI) and SIA Engineering Company Ltd (SIAE.SI).

Airframe and engine manufacturers like Airbus SE (AIR.PA), Boeing Co (BA.N) and Rolls-Royce Holdings PLC (RR.L) are also stepping up sales of packages that supply customers with maintenance, engineering and parts in a market that is valued at $77 billion a year by consulting firm Oliver Wyman.

A Lion spokesman declined to comment on the GMF AeroAsia deal, while GMF AeroAsia could not be reached immediately for comment.

Reporting by Cindy Silviana; Writing by Jamie Freed; Editing by Christopher Cushing

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