Malaysia set to become one of the best place for OEMs in Asia
Zulfikri Osman, COO of Asia Aerospace City talks about the strategic plan to make Malaysia one of the best place for OEMs in Asia with initiatives such as Asia Aerospace City.
Zulfikri Osman, COO of Asia Aerospace City talks about the strategic plan to make Malaysia one of the best place for OEMs in Asia with initiatives such as Asia Aerospace City.
He said, “The Asian middle class population will grow to a staggering 400% compared to the population today, by 2032. And with the regional businesses and borders opening up, the Asia Pacific region becomes the next frontier for the Aerospace growth. APAC will be leading the world passenger traffic revenue, with almost 40% of the world traffic revenue (RPK) share.
This will lead to the emergence of more Regional airlines and the regional air traffic movement. OEMs will find it profitable to serve the region. Because firstly, the demand for Aircraft will be much higher than that of in any other place. Secondly, managing costs in Asia is becoming increasingly a positive element that helps drive the profitability of the Aircraft manufacturers.
Aside from this, there are also issues. If you look at the books of Boeing and Airbus, there is a backlog of about 7,000 now and this invites questions about their speed of delivery to the market against an increasing demand. And this is after historical record deliveries achieved by both the OEMs in 2014. This tells us that the OEMs need to rapidly evolve technologies to support business strategies (Engineering services, Maintenance, Raw materials) and they need to revaluate their business strategies and leverage on low-cost to make their business sustainable.
This is why from our point of view, we think that the Asia Pacific region is where the industry players will come and do their business. Malaysia offers a good geo-political position, good security and political stability, competitive prices, human capital, and so we are good to position ourselves as “Malaysia – the gateway to Asia”.”
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The OEMs are geared for growth with APAC annual traffic at 7.3% vs. the world average at 4.7%, in the next 20 years. Meanwhile, fleet size is growing towards a staggering 12,000 aircrafts for the region until 2032. This is a leap of more than 200% from current numbers. Malaysia is indeed the gateway to Asia as it ushers the OEMs into a new business era through Asia Aerospace City.
Interview – Aerospace Industry in Asia: Malaysia to Become Hub for Aerospace OEMs in South East Asia
Company Profile – Leading aerospace hub in Asia – Asia Aerospace City