Capital A’s ADE plans to double revenue with new KLIA hangar

Upon completion of Phases 1 and 2, facility will make Asia Digital Engineering the largest MRO provider in Malaysia

KUALA LUMPUR: Asia Digital Engineering (ADE) is well positioned for substantial growth in the coming years as plans are underway to establish a new maintenance, repair and overhaul (MRO) hangar facility at the Kuala Lumpur International Airport (KLIA), its CEO Mahesh Kumar said.

ADE is the engineering and maintenance unit of Capital A Bhd.

Mahesh expressed confidence that revenue will double by 2025 and progressive growth thereafter.

The new hangar facility, spanning 8.19ha, is being constructed in two phases, with Phase 1 slated for completion in May 2024 and operational by August, while Phase 2 will follow swiftly, with operational readiness anticipated by October this year.

Mahesh Kumar revealed that the hangar facility will also see Phase 3 coming up once Phase 2 is completed, and the company has a first right of refusal with Malaysia Airports Holdings Bhd for a 2.07ha piece of land near the facility in KLIA.

“The soil testing work has begun (for phase 3), and we are planning to start construction once the second phase is ready, expecting completion by the end of 2026,” he told Bernama.

Mahesh said the hangar facility’s Phase 3 will accommodate another four lines of narrow-body aircraft.

Upon the completion of Phases 1 and 2, the hangar facility will make ADE the largest (MRO) service provider in Malaysia and one of the largest in the region.

Mahesh further stated that the new hangar facility would provide flexibility for ADE to service widebody aircraft such as A330 and B737 types.

Designed in an ‘L’ or boomerang shape, the facility would allow for maximum land use and more hangar lines.

It consists of two main sections, Hangar A (Phase 1), which can accommodate both narrow-body and wide-body aircraft, while Hangar 2 (Phase 2) is designed exclusively for narrow-body aircraft.

The facility could house 14 narrowbody aircraft or a combination of eight narrow-body and two wide-body aircraft simultaneously.

“A new taxiway will be build to facilitate aircraft movement to and from the hangar,” he said.

Mahesh added that the US$100 million (RM474 million) investment secured from OCP Asia Ltd last year to construct and operate the new hangar would also be sufficient to construct Phase 3.

Currently, ADE has a four-line hangar in Subang and a two-line hangar in Senai, Johor Baru, and a one-line maintenance facility in KLIA.

Mahesh said the company is eyeing line maintenance operations in the Philippines, Indonesia, Cambodia, and Thailand.

He said operations in the Philippines and Cambodia are expected to begin by the first half of 2024, and Indonesia and Thailand in the second half of the year.

He added that ADE had obtained approvals from the respective aviation authority’s approval to service aircraft from Thailand, the Philippines, Cambodia, Nepal, and Indonesia and is eyeing approvals from more countries in an effort to expand its operations.

Mahesh said obtaining the European Union Aviation Safety Agency (EASA) Part 145 Approval last November was the biggest assurance in bringing the business to greater heights.

“With the EASA approval, we look towards servicing more foreign countries.

“Although the new hangar is not completed yet, the slots are fully booked for the end of this year.

“So, the earliest we can look to dive into the foreign market would be next year,” he said.

On Dec 7, 2023, ADE recorded its 100th ‘C-Check,’ a comprehensive maintenance inspection, under two and a half years, a record time frame since inception in September 2020.

Meanwhile, Mahesh said there is a potential for ADE to be listed in Bursa Malaysia in the future.

“Definitely, we aspire to get ADE listed. You know, but you never say no,” he said without mentioning a timeframe for the listing.

He also opined that the new hangar facility would likely speed up the potential listing process as the revenue would grow once ADE commences operations at KLIA.

“In terms of listing plan, Capital A has various businesses under its portfolio that have listing potential.

“The group would have to balance the priorities between each business’s growth strategies and funding and evaluate the right listing timing to maximise shareholder value. So, let’s see where it goes,” he added.