Market Synopsis of

The Malaysian Aerospace Maintenance, Repair & Overhaul (MRO) Sub-Sector

A. Sector Overview

The approximately USD 46 billion global aircraft Maintenance, Repair and Overhaul (MRO)
market witnessed the strongest year–on–year growth of about 10% during 2008–2009. Driven by
an increasing fleet of newly acquired aircraft worldwide, shortage of trained and experienced
professionals, and a need to cut aircraft maintenance and operational costs, MRO market holds
out a plethora of opportunities for players in the technical services outsourcing business. Leading
players across the world are consolidating and adapting to the market dynamics.

The above graph shows the details of Global MRO spending segmented by region in 2008, while
the graph below shows the projected Spend by Region in 2013. It should be noted here that the
biggest projected cumulative growth, driven by sustainable fundamentals is in the Asia Pacific
Regions ($5.9 billion to $9.6 billion). Hence, Asia Pacific is the next growth engine after the North
American region for the coming years.
B. Malaysian Market

The Malaysia aircraft maintenance, repair and overhaul (MRO) sector has seen tremendous
growth in recent years. Despite very stiff competition from Singapore to become the MRO hub of
choice in Asia, Malaysia is determined to carve out its place under the sun. Pundits say the
recent crisis in the aviation industry caused by soaring fuel prices, and the current global
economic downturn, is shifting the balance of cost- effectiveness in Malaysia's favour.

In June 2008, an Aerospace & Defence consultant from Frost & Sullivan said Malaysia has the
potential to capture a higher market share in the aircraft MRO industry with its existing
infrastructure and available facilities. The recent downturn, which has seen the worst and is
picking up, has forced global players to take a hard look at their cost structure. This strategy is
slowly shifting down stream activities to geographies that offer cost effective infrastructure and
human resources.

Malaysia has both in ample doses along with a stable economy in terms of reined in inflation and
other related cost structure. This coupled with home to two of the most successful airlines in the
world makes Malaysia a force to be reckoned with in the near to medium future. This scenario is
further amplified with the keenness of the government to position the nation to the next quantum
jump in terms of economic activity. Hence, Malaysia is an ideal location to become the next
regional (possibly global) hub for Aerospace MRO activities.

a) Malaysian Aerospace Industry Size

Malaysia is targeting to capture 5% of global MRO market by 2015; capabilities higher up the
MRO value chain are necessary in order to close the gap.

Malaysian Aerospace Industry Turnover

3000
2500
RM (million)

2000
1500
1000
500
0
2005 2006 2007 2008 2009

Commercial Aircraft Fleet Size in Malaysia

400

300

200

100

0
2005 2006 2007 2008 2009
b) Growth Rate and Forecast

The Global MRO market is growing exponentially. A six year analysis indicates that the
market will grow from $46 billion in 2010 to $ 52 billion in 2013.

Outsourcing of MRO work has been developing slowly but steadily over the last 20 years or
so. With the recent damp market coupled with the Icelandic volcanic ashes, it has become
extremely important for Airline operators to outsource its maintenance work, and get leaner in
terms of operational cost.

This industry has fast become extremely lean in terms of cost structure. One of the main cost
drivers has always been MRO. Instead of maintaining an in-house centre that caters
exclusively to internal requirement, it has become a norm to outsource MRO. Setting up an
MRO is a costly affair, and if it is solely for internal consumption, it becomes a very expensive
cost centre. Initially legacy airlines tried to spin off their MRO centre as an independent
centre catering to internal as well as third party requirement.

Such policies were not very successful due to the fact that the mother company was naturally
in competition with the target market. A case in point is, though Singapore Airlines has a
vibrant MRO offshoot (SIA Engineering), its domestic competitor, ST Aerospace is a bigger
name in the MRO sector; from revenue perspective it is within the top two MROs in the world,
today. The chart below indicates the Global MRO Market Share for year 2008 while ST
Aerospace is at #2 in ranking; SIA Engineering is at #7.

The Global MRO outsourcing market is poised to grow from an overall 52% in 2006 to nearly
65% in 2016. This is a clear indication of the strong potential for outsourced MRO business in
the coming years. With Asia Pacific slated for the strongest growth potential growth of
outsourced MRO activities stands a rock solid chance to thrive in this region.
Hence, with fiscal pressures mounting, legacy airlines are forced to look outside the box
for a solution. Malaysia Airlines has already converted its MRO into an independent
centre, MAE. But market forces, mainly driven by the AirAsia model will eventually ensure
MAE will become less of a MAS subsidiary and more of an independent organization.
This offers a multitude of opportunities for potential foreign investors in Malaysia in the
near future as there is a huge vacuum for a dedicated MRO service provider in the
country for all domestic and regional airliners.

Though Singapore is a major competitor, Malaysia offers a lower cost base for all
segments of the MRO sector. In the long run this will be a major boost for building the
competency and capacity in the country.

From the MRO perspective, the following traditional market behaviour will hold in good
stead for the development of Malaysian MRO segment.

1) On average worldwide, 80% of the outsourced MRO work always remains in the
airliner’s region, while 20% goes out of the region.
2) This is driven mainly by cost factors.
3) The larger aircraft (such as 747 and 777) are more likely to have a D Check done
abroad compared to a single aisle aircraft.
4) The same is true for other components of MRO business such as engines.
5) Even though the trend is to ensure such capability developments happen within
proximity of the customer base, there are some cost benefits to exporting such
services.

Based on these facts, Malaysia is well positioned to capture a sizable chunk of the
market due to a vibrant hinterland fast developing in the region. A point in case is the
manner in which Indian private airlines sending its aircraft over to Malaysia for heavy
maintenance due to a paucity of such service providers in the country.
c) Employment
The Malaysia MRO ‘big three’ companies employs more than 5000 various skilled
employees;

i. MAE - 3,500 employees

ii. AIROD - 1,700 employees
iii. GE Engine Service - 500 employees

Supported by over 20 other companies bringing total MRO employee to over

7,000.These numbers are expected to increase at the rate of 15-20% annually for next 5
years. Though there are many Aviation Maintenance Schools set up in the country over
the years, there is still a major gap in terms of an internationally acceptable quality
school.

Such a school should be directly affiliated to international schools and regulatory bodies
whereby the students should be in a position to take relevant certification examinations to
qualify for a booming international market. Such an organization will help in developing
the quality of the manpower in the field, help the students to get an international
exposure, and allow the domestic companies to set up operation in foreign lands so as to
be closer to the market itself. This is the route Singapore has taken so far. There is major
shortage worldwide for License Aircraft Maintenance Engineers (LAME) and associated
technicians, and it will be some years before the shortage is addressed.

The single aisle as well as wide-body aircraft market is already shifting to Asia with China
and India leading the pack. North America is no longer the biggest market for aircraft
OEMs today, and hence there will be a strategic shift in critical support structures towards
Asia. Malaysia with its geographical, demographic and cost advantage is well poised to
capture a large segment of the market. For that, infrastructure and human resources is
critical and hence require strategic planning well ahead of its time.

d) Key MRO Statistics (MiGHT & Malaysia Aerospace Council)

Civil MRO Market, 2008

13% 9%
Civil Helicopter

Air Transport

General/Business
Aviation
78%

In spite of more vibrant GA Sector in Malaysia compared to other neighbouring countries,

Malaysian GA market only contributes to 13% of the total MRO business in the country.
One of the reasons for this is due to the outflow of such value added work to Singapore,
predominantly due to non-availability of approved MRO centres.

This coupled with the fact that all major OEMs, spares manufacturers and PMAs are
represented in Singapore. Roughly speaking, GA market from East Africa all the way to
East Asia depends on Singapore for spares and other AOG conditions.

This is both a boon and bane for Malaysia. Boon in the sense with the higher cost
structure in Singapore, Malaysia is a natural choice for operators to shift business in the
coming years, with its stable environment and government incentives. It is also a bane as
such due to the fact that a matured market is already in operation within Malaysia’s own
backyard.
 As far as commercial airlines are concerned, major work is still been carried out in the
country, mainly by MAS. AirAsia is reportedly still depending a lot on the Singapore
infrastructure due to legacy airline rivalry which affects efficient support for its growing
fleet. Despite a number of efforts, to collaborate with local companies (SAE being one of
them), AirAsia is still not successful to indigenize its MRO requirements and hence
reduce its forex outflow. An opportunity exists for a well known international MRO to enter
the Malaysian market to service this customer effectively.

Despite its geography Malaysia has a small fleet of helicopters in the domestic civil space
and hence the smaller market for its MRO. This is a market that can grow especially in
the Eastern part of the country where land based infrastructure is still in its infancy. Major
OEMs such as Eurocopter is making good inroads today, and will require a major boost
in the MRO sector, in the near future.

Eurocopter is currently operating as an inclusive organisation where by all after sales

support services are been carried out by itself. This will only be true for a certain period of
time before which it becomes too unwieldy for one organization to handle all the work. It
should also be considered that such monopolistic tendencies will open up avenues for
other players to enter the market to ensure competition is maintained and overall cost
structure is reduced drastically.

Malaysian MRO Turnover

5000

4000

3000

2000

1000

0
2005 2006 2007 2008 2009
Year (e)

e) Ideal MRO Locations

Due to the geographical nature of the country, one single location will not be able to
serve the entire gambit of the industry. We will explore a few such locations here based
on strategic market share improvements.

i. Sultan Abdul Aziz Shah Airport, Subang (SAAS)

SAAS airport is currently the biggest MRO centre in the country, mainly due to the
presence of MAE as an anchor customer and supplier. Approximately 90% of the
nation’s MRO infrastructure is located in this airport. Malaysia Airports Holding Bhd
(MAHB) has set up an independent agency known as Malaysian International
Aerospace Centre (MIAC) to manage this business at Subang Airport.

Eventually MAHB aspires to bring all required players for the MRO sector so as to
synergise the entire vertical requirements of the market at this location.

ii. Senai Airport

This is the Southern most airport in peninsula Malaysia is the nearest airport to
Singapore. Senai holds the most promise in terms of capturing a significant share of
the Singapore MRO overflow as cost structure becomes high over there.
 Senai has the ability to service Singapore at the same time maintaining a significantly
lower cost, which gives customers long term benefits. The Malaysian government is
already incentivizing the Southern region of peninsula Malaysia in order to capture a
large number of Singaporean businesses and MRO will be one of them.

iii. Kota Kinabalu International Airport (KKIA)

KKIA airport is the busiest international airport in the country after KLIA. It is an
alternative transit point between the East Asia & North Asia and Australia & New
Zealand. Over the years traffic has been on the rise, and one of the reasons for the
major airport expansion that was carried out recently by MAHB.

KKIA airport has the right environment for major MRO centres and support activities
due to this market. It is also a hub for regional aircraft market and hence is ideal to
set up the related support structure.

Most of the rotary wing fleet is also located in East Malaysia and hence KK Airport is
a major potential for related activities. Currently all such activities are been carried
out in Singapore.

f) Commercial vs. Military

The military segments has also provides many opportunities for MRO business to grow.
Though Malaysia is not politically located along the fault line of any major regional or
international conflict zones, it maintains a fairly modern Air Force with a small but potent
air asset. Though fleet size is not singularly big, it operates a number of cross platforms
sourced from different parts of the world.

One of the recent year’s gap has been an effective solution for turnkey MRO for its brand
new Su-30MKM Air Superiority Fighters. Although for the time being the Royal Malaysian
Air Force (RMAF) is maintaining this growing fleet, it is widely reported that a RMAF is
keen to offload this activity to an organization that is competent for such jobs.

g) Major Domestic Players

I. Malaysia Aerospace Engineering (MAE)

It is a certified approved MRO organisation by 31 National Aviation Authorities

including the Civil Aviation Safety Authority (CASA), European Aviation Safety
Agency (EASA), the US Federal Aviation Administration (FAA) and Malaysian
Department of Civil Aviation.

A key thrust of the plan was to step up the third-party revenue, with a target of RM
520 million in 2009. Key priorities for the year included finalizing all joint-venture
activities, on-shore and overseas including JV agreements with Qantas, Alenia
Aeronavali of Italy and GMR of India. MAS E&M has over 30 years of experience in
the MRO business.

MAE is poised for further growth as there continues to be a high demand for its
services, even in these tough times. Over the last two years, third-party revenue
contribution has increased 100% from RM218 million in 2006 to RM438 million in
2008, and the organization has seen a 50% increase in the number of customers.

II. AIROD (Aircraft Inspection, Repair & Overhaul Depot)

One of the pioneers in Malaysian MRO is Airod; the name being an acronym for
‘Aircraft Inspection, Repair & Overhaul Depot'. Airod was established in 1976 as
the first and only in-country facility to support maintenance, repair and overhaul of
aircraft belonging to the Royal Malaysian Air Force (RMAF). In 1985, Airod was
privatised as a joint- venture company between National Aerospace & Defense
 Industries (NADI) of Malaysia and Lockheed Aircraft Systems International (LASI)
of USA.

Airod is today in complete indigenous ownership, and is the major MRO operator in
the military space of the country. Major customer is obviously the RMAF. Airod is
the only maintenance and modification centre In Malaysia authorized by Lockheed
Martin for C-130/L-100 service. Major customers from Middle East, ASEAN, East
Asia and Africa use its facility to carry out major overhaul, very regularly.

III. Sepang Aviation Engineering

At the KL International Airport (KLIA), Sepang Aircraft Engineering (SAE) was

established and signed up Malaysia-based low-cost carrier AirAsia as its launch
customer. It has built two large hangars at the airport and is currently looking to
attract third-party work.

Apart from MRO and technical design services for wide and narrow body aircraft,
SAE aims to provide full maintenance system and configuration management,
reliability data, cost control and status reporting for customers, through its self-
developed computer system.

Due to some unforeseen circumstances and delay in launching its hangar facilities
in KLIA, AirAsia is still not using SAE facility at the moment. Unconfirmed report
has it that there has been an ownership change in this company, and is prime
candidate to partner a foreign player to shore up its fortunes.

IV. SME Aerospace

SMEA is a wholly owned subsidiary of the National Aerospace & Defence

Industries (NADI) Bhd, and is a premier metal-based aerospace parts manufacturer
in Malaysia has a wide range capabilities and approvals, including Nadcap
approvals. SMEA manufactures aircraft parts, components and assemblies for
customers worldwide.

V. Composites Technology Research Malaysia (CTRM)

Composites Technology Research Malaysia Sdn. Bhd. (CTRM) was incorporated

in 1990 with Ministry of Finance incorporated as its principle shareholder. Its
strategic role was to develop the aerospace and composites industries.

The Malaysian DCA has certified CTRM's wholly owned subsidiary, CTRM AV as
an Approved Maintenance Organisation for light aircraft such as the Eagle 105B,
Cessna 300 and the Cessna 400. DCA Malaysia also approved CTRM AV and its
engineers to sign off the Certificate Release to Service for the Diamond DA40 &
DA42, Piper PA34 & PA28, and the Cirrus SR3G.

CTRM AV also provides out-of-base maintenance by posting its qualified engineers

and technical personnel in Ipoh, Kota Bahru and Bintulu. It also offers maintenance
services in Johor, Subang and as far away as Bangkok, Thailand.

h) Major Foreign Players

I. GE Engine Services Malaysia

General Electric decided on Malaysia as the regional hub for its aircraft engine
MRO activities many years ago. GE vice-chairman, president and chief executive
officer John G Rice recently announced a US$ 3 million investment for the
expansion of the company's engine overhaul and service maintenance facility in
Subang.
 John G. Rice said, "The capabilities expansion at GE Engine Services Malaysia
(GEESM) sees a further US$ 3 million to be invested in the next three years that
will generate US$ 50 million in revenue. These new investments will offset the
projected drop in older product lines and will keep GEESM at the leading edge of
engine MRO technology.".

GEESM is a joint venture between GE Engine Services, Inc, owning 70% and
MAS, which holds the remaining 30%.

II. Eurocopter Malaysia Sdn Bhd

A wholly-owned subsidiary of Eurocopter (EC) Group, Eurocopter Malaysia (ECM)

was incorporated in August 2002. Since then, it has established its footing as not
only a centre of sales and distribution of EC products, but also a leading
maintenance, repair and overhaul (MRO) service centre in Malaysia.

Spanning more than 50,000 square feet, ECM is fully-equipped to provide a broad
spectrum of services ranging from scheduled and unscheduled maintenance,
aircraft modifications, logistics support, ground handling and hangarage.

III. Honeywell Aerospace Services (M) Sdn Bhd

A subsidiary of Honeywell Aerospace LTD, established in 1998 in Malaysia, mainly

involved in repairing and overhaul of Auxiliary Power Unit (APU) and its associated
components. Malaysian centre certified by FAA.

Auxiliary Power Units deliver highly reliable electrical and pneumatic power
solutions for a variety of aircraft operations, including main engine starting, cabin
cooling and electrical power generation. Using leading edge technologies,
integrated system architectures and innovative service solutions to deliver higher
performance with enhanced reliability and reduced operational costs.

IV. Hamilton Sundstrand Malaysia

Division of United Technologies Corporation USA is an established joint venture

company in Malaysia in the repair and overhaul of commercial and regional
aerospace components. JV company with MAS, commence operation in 1996 in
Malaysia. They are mainly involved in maintenance, repair and overhaul aircraft air
conditioning system, pneumatic valves and starter, heat exchanger and pneumatic
drives units. An approved repair station certified by FAA.

With 2008 revenues of 6.2 billion, Hamilton Sundstrand employs approximately

18,000 people worldwide and is headquartered in Windsor Locks, Conn. Among
the world's largest suppliers of technologically advanced aerospace and industrial
products, the company designs, manufactures and services aerospace systems
and provides integrated system solutions for commercial, regional, corporate and
military aircraft. It also is a major supplier for international space programs.

United Technologies Corp., based in Hartford, Conn., is a diversified company

providing high technology products and services to the building and aerospace
industries worldwide.

V. Agusta Westland (M) Sdn Bhd

Located at Kuala Lumpur's Sultan Abdul Aziz Shah Airport, Agusta Westland
Malaysia’s regional maintenance and support centre is a Malaysian DCA approved
maintenance and repair organization. Agusta Westland Malaysia Sdn Bhd is
providing local support and training for the growing fleet of Agusta Westland
customers in the region.
 Mainly involved in Maintenance, Servicing and providing Simulator services for
wide range of helicopters for Armed Forces , Fire and Rescue Department
(Bomba) and Malaysian Maritime Enforcement Agency (MMEA). Italian and British
manufacturers of Augusta Westland has already invested RM20mil to expand its
Subang facilities. The firm has allocated up to RM60mil for the upgrade.

i) Regulatory Frameworks & Authorities

I. Malaysian Aerospace Council (MAC)

- MAC is national level steering body, chaired by the Prime Minister and is dedicated
to the development of the aerospace industry at large in the country. All major
industry and government institutions are represented on this body.

II. Malaysia Industry- Government Group of High Technology (MiGHT)

- MiGHT serves as the Secretariat of the MAC through the Office of the Science
Advisor. In addition MiGHT is a point of contact and played pivotal role in the
development of aerospace business in Malaysia.

III. Malaysia International Aerospace Centre (MIAC)

- MIAC is a wholly owned subsidiary of Malaysia Airport Holding Berhad (MAHB)
that would function as One Stop Centre manager for the development and
facilitator to the industry players in establishing their MRO business in Malaysia.

- In 2009 the government has already started initiation on this plan and MAHB is
currently working on the same. The first programme is to set up a dedicated
Heliport with a dedicated MRO facility addressing the rotary market. Eventually
MIAC is slated to convert SAAS Airport into a one stop Aerospace Centre, MRO
being one of its key initiative.

IV. Department of Civil Aviation (DCA)

- Establish as an organisation under Ministry of Transport, DCA is the primary
aviation authority of Malaysia issuing of licenses and directives for aerospace
industry.

- DCA was the first Airworthiness Authority in the ASEAN region to get the coveted
BASA Agreement with FAA for the certification and manufacturing of light aircraft
under 12,000lbs category (metal). This agreement was further extended later to
cover composite aircraft also.

j) Market Entry Challenges

I. Infrastructures and Building

• Investors are not willing to invest in buildings or infrastructures due to the high
risk associated to the lease of land from MAHB.
• This issue has been recently alleviated by MAHB by issuing lease agreement
for a period of 30 + 30 years, instead of the previous 5 year rolling lease
tenure.
• More over, MAHB, via its wholly owned vehicle MIAC is currently embarking on
a massive programme to build customized facilities for MRO organizations in
SAAS.
• Within a period of a year or so, such facility will be available for foreign players
nd rd
(2 and 3 Tier) to lease.
st
• 1 Tier players will be issues with land for further customized development to
suit specific requirements.
• In the case of Spirit Aero Systems (SAS), a major Aerostructure player in the
global market, the government even built the custom built facility for its usage
with a 60 year lease.
• Any players who want to enter the market will have to work with MAHB/MIAC
for such incentives.
 II. Incentives and Grants

• Approval for incentives and grants requires a process involving multiple

Authorities namely; Malaysia Industrial Development Authority (MIDA), Ministry
of International Trade and Industry (MITI), Ministry of Finance (MOF) and
Economic Council in Prime Minister Department.
• The process is been constantly revised to make it more efficient.
• New players in the market; foreign and domestic; stand a good chance to get a
Pioneer Status which entitles the organization to a Tax Free status for a period
of 5 years, further extendable for another 5 years.

III. Ease of Doing Business

• Malaysia ranked lower than countries such as Singapore, Thailand, Japan and
South Korea for ease of doing business.
• Multitude of procedures and lengthy approval processes in setting up and
construction of buildings.
• Never the less the government is very responsive in such obstacles and is
constantly evolving the processes and procedures.
• It has one of the biggest domestic markets for foreign players to exploit, while
building a regional clientele base.
• Continuing Foreign Direct Investment (FDI), in spite of recent slump is an
indication of the global investor’s confidence in the country’s fundamentals.
• English is widely spoken and is the primary language of business.

IV. Human Capital

• Global shortage phenomenon in skilled technical manpower is very much the

bane of the Malaysian market too.
• The available work force is quite mobile within the region and beyond.
• Never the less there are a number of institutions in the country producing
technicians, maintenance engineers and aeronautical engineers.
• These institutions currently lack international exposure, where by their students
require additional on the job training before reaching international standards.
• Traditional societal preferences for management and finance related career
plays a key role in the lackadaisical attitude towards pure technical career.
• The country is currently undergoing a transition from a low cost economy to
value added economy, and hence such transitional losses in terms human
capital preferences are observed.

C. Sub-sector Identification

This section deals with the opportunities present in Malaysia for Canadian companies.

I. Aviation Training

As mentioned in the preceding paragraphs, there is a latent market in the country

for Aviation Training. Such a market can easily cater to the domestic as well as
regional requirements. There are a few Government Linked Institutions currently
keen to pursue setting up of such organization for the benefit of the citizens. In line
with the government’s aspiration of transforming the nation from a low cost
producer to a higher end value addition economy, education as well as high
technology sectors is heavily incentivized. Potential Canadian companies can take
either a stand alone route or take a strategic partnership route with one of the
many such institutions currently in operation.

II. Components Manufacturing

Aerospace components manufacturing was one of the initial foray made by the
government of Malaysia in the early 90s. This decision was made on the back of
 the Advanced Jet Trainer Hawks procurement by the government from BAE
SYSTEMS (formerly known as British Aerospace). The route taken initially was
turnkey design, certification, testing and manufacturing of General Aviation aircraft;
both metal and composites. Eventually this gave birth to two products; MD3-160
Aerotiga, an all metal ab-initio trainer aircraft and the Eagle 150-B, an all composite
ab-initio trainer aircraft. Today, these technological forays have given birth to
established players such as SME Aerospace Sdn. Bhd. (metal based aerospace
component and sub-assembly manufacturers) and Composites Technology
Research Malaysia Sdn. Bhd. (Composites component and sub-assembly
manufacturers).

On the back of such organizations, starting from outsourcing to Risk Sharing

Programmes, foreign players are setting up operations in the country to higher end
completion jobs before sending it to the OEMs. Spirit Aero Systems in SAAS
Airport is one such example. Canadian companies involved in such operations
have an ideal opportunity to set up operations in the country to service such first
tier companies’ busy setting up operations here.

III. MRO

Over the next five years or so, Malaysia alone will be home to approximately 300+
commercial aircrafts. Though MAS is already doing most of the work in house,
AirAsia, till date, has no such intentions. This presents a huge potential for
Canadian investors for the MRO space. Besides the Heavy Maintenance Shops,
the support structure is quite weak in the country currently. This provides with ideal
opportunities for Canadian investors. Some of the areas that provides a lucrative
entrance for such investors are as follows,

• Avionics repair shops.

• Electrical repair shops.
• Interiors refurbishment establishments.
• Composites component repair shop.
• Nacelles Repair Shop.
• Aircraft seats refurbishment shop.
• NDT Facility.
• Ground Support Equipment Repair Shop.

IV. Aircraft Manufacturing

• There is an ideal environment for companies like Viking Aerospace to set up

their Far East operation in Malaysia.
• Twin Otter type of aircraft has an ideal market in the East Malaysian Rural Air
Services.
• Such models can subsequently be duplicated in the ASEAN region.
• There is a huge potential for Rural Air Services in the BIMP-EAGA (Brunei
Indonesia Malaysia Philippines – East Asia Growth Area) Region, with
approximately 100 million population catchment area.
• This operational model can then be successfully duplicated to other parts of the
world.

The Government of Canada has prepared this report based on primary and secondary sources of
information. Readers should take note that the Government of Canada does not guarantee the
accuracy of any of the information contained in this report, nor does it necessarily endorse the
organizations listed herein. Readers should independently verify the accuracy and reliability of the
information.