By Kisho Kumari Sucedaram
KUALA LUMPUR, April 21 (Bernama) -- The National Aerospace Industry Corporation Malaysia (NAICO) remains optimistic that the country’s aerospace industry will expand between 15 and 20 per cent by 2030, underpinned by strong investment momentum and growing capabilities across the ecosystem.
Chief executive officer Dr Shamsul Kamar Abu Samah said the positive outlook is driven largely by investments already secured through the Malaysian Investment Development Authority (MIDA), alongside a robust post-pandemic recovery.
“We anticipate the industry will expand between 15 per cent and 20 per cent, given that a number of investments have already been secured through MIDA. We are quite positive, as development after COVID-19 has been tremendous,” he told Bernama on the sidelines of the Defence Services Asia (DSA) and National Security (NATSEC) Asia 2026 exhibition here today.
MRO expansion and manufacturing to drive growth
He said growth will be supported primarily by continued expansion in aerospace manufacturing activities, as well as the strengthening of Malaysia’s maintenance, repair and overhaul (MRO) segment.
Shamsul noted that new investments in MRO, including the establishment of base maintenance operations in Subang by a subsidiary of SIA Engineering Company, are expected to attract more third-party aircraft into Malaysia.
“This will bring more wide-body aircraft into the country, complementing Malaysia’s existing strength in narrow-body platforms such as the Boeing 737 and Airbus A320,” he said.
Push into avionics and emerging segments
Beyond traditional segments, NAICO is also pushing for expansion into higher-value and emerging areas, particularly aviation electronics, or avionics, leveraging Malaysia’s strong electrical and electronics (E&E) ecosystem.
“We are looking at expanding into aviation electronics, including complex programming, software development and system integration. With our strong semiconductor and E&E capabilities, this is a natural progression for the industry,” he said.
In addition, he said NAICO is prioritising new growth areas such as drones, advanced air mobility, space technologies, small satellites and rocket systems as part of its five-year expansion strategy, in line with the government’s focus on high-growth, high-value industries under the New Industrial Master Plan.
Geopolitical risks, but opportunities emerge
However, Shamsul cautioned that external headwinds, particularly ongoing geopolitical conflicts, could moderate the pace of growth.
He said prolonged conflicts in regions such as West Asia, as well as the Russia-Ukraine war, have disrupted global supply chains, especially for critical raw materials like titanium, which are essential for aerospace manufacturing.
At the same time, rising jet fuel prices are increasing operational costs for airlines, potentially dampening flight frequencies and, in turn, affecting demand for MRO services.
According to the latest data from the International Air Transport Association (IATA), the global average jet fuel price last week (April 17) stood at US$184.63 per barrel, down 6.7 per cent from US$197.83 per barrel the week before.
Despite these challenges, Shamsul said opportunities remain for Malaysia to position itself as an alternative supply chain hub and a stable destination for aircraft maintenance services.
“We have excess capacity and a stable ecosystem. This gives us the opportunity to attract aircraft from West Asia and Europe for MRO services here,” he said.
He added that global demand for aircraft remains intact, driven by airlines’ need to replace ageing fleets and adopt more fuel-efficient and environmentally friendly models.
“The backlog is still there. Demand for new aircraft will continue, but output may be affected due to supply chain disruptions,” he said.
In this context, NAICO aims to leverage the situation to further develop local capabilities and integrate Malaysian companies into global supply chains.
“This is an opportunity for us to enhance our technological capabilities and position local players as part of the new supply chain development,” he added.
Overall, Shamsul said NAICO remains confident that Malaysia’s aerospace industry will sustain its growth trajectory, supported by strategic investments, diversification into new segments and continued collaboration with global industry players.
He said NAICO plays a central role in facilitating engagement between local manufacturers and global original equipment manufacturers (OEMs), particularly in strengthening supply chain linkages and attracting higher-value investments into the country.
“As a coordinating agency under the Ministry of Investment, Trade and Industry, we facilitate collaboration across the ecosystem, from local industry players and academia to international OEMs and Tier 1 and Tier 2 suppliers,” he said.
NAICO also drives research, innovation and talent development through initiatives such as the Malaysia Aerospace Centre of Excellence, which houses specialised laboratories focusing on areas including engineering design, 3D visualisation, additive manufacturing, non-destructive testing and metrology.
“These platforms allow local companies to enhance their capabilities and meet the requirements of global players, while at the same time supporting the development of a resilient and competitive aerospace supply chain,” he said.
Yesterday, Prime Minister Datuk Seri Anwar Ibrahim called on global defence and aerospace industry players to engage more closely with Malaysian manufacturers, underscoring the country’s growing role in high-value global supply chains.
He said Malaysian companies have earned their place in some of the world’s most demanding commercial supply chains through a strong culture of precision and accountability, which is equally applicable to defence aerospace.
-- BERNAMA
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