Asia Defense

Indonesia: ASEAN Aerospace MRO Leader?

The creation of a new company highlights the Southeast Asian state’s ambition to become a key regional player in aerospace MRO services.

Indonesia: ASEAN Aerospace MRO Leader?
Credit: Flickr/sbamueller

Earlier this month, several Indonesian state-owned aerospace companies inked a new agreement to cooperate in setting up a new holding company to provide aerospace maintenance, repair, and overhaul (MRO) services and help position the Southeast Asian state as a regional leader in this field.

A memorandum of understanding (MoU) to create the new company, the Indonesian Service Hub, was signed by the Ministry of State-Owned Enterprises and six Indonesian state-owned enterprises in the aerospace industries, namely GMF, PT Dirgantara Indonesia, PT Nusantara Turbine and Propulsion (NTP), Indopelita, and Meripati Maintenance Facility (MMF).

At a more basic level, the move to create of the new firm is in line with Indonesia’s effort to strengthen its domestic defense industry, which President Joko “Jokowi” Widodo had outlined as a priority for his government (See: “An Indonesian Defense Revolution Under Jokowi?”).

According to Indonesia’s Minister for State-Owned Enterprises Rini Soemarno, the hope is that combining the capabilities of these various state-owned firms will strengthen the competitiveness of the national aerospace industry when it comes to MROs. The company is expected to provide both commercial and military aerospace MRO services.

But Soemarno also explicitly said in her remarks that her broader goal was also help position the Southeast Asian state as a key regional leader in ASEAN and also Asia more generally in both the military and commercial aspects of MROS. According to the Indonesian national news agency Antara, she added that if Indonesia is able to leverage the geostrategic advantages it has as well as the combined capabilities of its industry, it could even grab some market share from other actors such as China.

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Few details were provided on exactly how this would be achieved, and it is still early days to judge whether the new company will actually take off. But the stated goal for Indonesia is clear.