Abstract
Indonesian Aviation Market 2020 was predicted to grow around 7.0% compared to 2019. It gave Indonesian MRO industry an optimism at first, at least in the beginning of the year, before WHO declared COVID-19 pandemic in March 2020. The COVID-19 pandemic has a dire impact on the aviation & MRO industry. As of July 2021, flights still haven’t reached 50% compared to pre-COVID era. Many MRO companies, including GMF AeroAsia, must face an unprecedented situation that caused the market to shrink significantly, and enter the financial distress zone. Several initiatives have been taken by the company. However, with the protracted pandemic conditions and the uncertainty of Indonesian Aviation Market recovery, further strategies are needed to survive and growth. This study aims to analyze the company and develop a strategy based on 2 stages, namely the retrenchment phase and the recovery phase. The retrenchment phase will focus on the survival strategy, while the recovery phase will focus on the growth strategy using scenario planning because the future is still uncertain. From the analysis and interviews, several initiatives and strategies for survival and growth were developed. Several initiatives for survival include headcount cuts, operational efficiency, product elimination, liquidation & divestment, equity for debt swaps, and renegotiate with lenders. While the growth strategy was developed based on 4 scenarios, namely Flying Through Thunderstorm, Flying with Engine Failure, Flying with Broken Wings, and Flying Zig-Zag.
Highlights
PT Garuda Maintenance Facility Aero Asia Tbk is known as the aircraft Maintenance, Repair, and Overhaul (MRO) company with various acknowledgments from international institutions
An aviation consultant developed 3 scenarios for post-pandemic conditions based on the speed of vaccine distribution, the wave of outbreaks, and the economic recovery
Questions posed to interviewees included how the Covid-19 pandemic was affecting the aviation industry, what risks/uncertainty/factors are affecting MRO companies like GMF AeroAsia in the 5 years, which are the driving forces that have high impact, and which are the driving forces that have a high level of uncertainty
Summary
PT Garuda Maintenance Facility Aero Asia Tbk is known as the aircraft Maintenance, Repair, and Overhaul (MRO) company with various acknowledgments from international institutions. In 2020, when the pandemic hit the aviation and MRO industry, GMF recorded revenue of 254 MUSD, or down more than 50% compared to 2019. As of July 2021, International & Indonesian flights still haven't reached 50% compared to pre-COVID era. An aviation consultant developed 3 scenarios for post-pandemic conditions based on the speed of vaccine distribution, the wave of outbreaks, and the economic recovery. In the best scenario it is predicted that flight conditions will return to pre-covid (2019) conditions in Q2 2022, while in the worst scenario is in Q1 2024. This indicates that there is high uncertainty in the recovery of world aviation conditions, including MRO as a supporting industry. In the midst of uncertainty and rapid change, GMF must be able to prepare a further strategy to survive and growth
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Current Science Research and Review
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
