Qantas Signs Joint Venture MoU with MAS Aerospace Engineering

Sydney, 19 December 2007

Qantas said today it had signed a Memorandum of Understanding (MoU) with MAS Aerospace Engineering (MAE), a wholly-owned subsidiary of Malaysia Airlines, to establish a joint venture company to provide airframe maintenance services from Malaysia.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the company would:

* target the rapidly growing Asia-Pacific MRO (Maintenance, Repair and Overhaul) market, which was expected to reach US$15 billion in sales by 2016; and
* perform overflow airframe maintenance for Qantas and its subsidiary airlines.

Mr Dixon said he was confident the joint venture would create a world class and very cost competitive MRO.

"Qantas Engineering will have a significant input into the management, engineering and quality system of the new company, which will commence operations in 2008."

Mr Dixon said the venture built on the $300 million investment Qantas had previously announced for its Australian engineering operations.

"It will also complement our business review program, which we started in 2006.

"This venture also reflects the Qantas Group's objectives of growing our aviation-related businesses into growth markets in Asia and the Pacific."

Mr Dixon said Qantas had for many years contracted overflow engineering work to a variety of MROs in Asian countries.

"The operation in Malaysia will provide the opportunity to consolidate some of this work while providing further growth for the Qantas Group."

The Managing Director/Chief Executive Officer of Malaysia Airlines, Mr Idris Jala, said, "MAS Aerospace Engineering which leverages the 35-year strength of Malaysia Airlines' engineering and maintenance capabilities is well positioned to build a world class aviation MRO joint venture with Qantas.

"Our priority will be to develop Kuala Lumpur as a hub for the Asia Pacific region for MRO services. Malaysia Airlines is already the leading civil MRO provider in Malaysia, and this will further cement our position in the region," he said.

Malaysia Airlines Engineering & Maintenance, which is part of MAE, is a leading aircraft maintenance repair and overhaul organisation, with over 35 years' experience. It has over 1,000 highly trained engineers, providing maintenance services for A, B, C and D checks for aircraft types B747, B777, B737, A330, A320 to airlines across the world.

Issued by Qantas Corporate Communication (Q3705)
Email: qantasmedia@qantas.com.au