CHAPTER 1Company Organization Chart

CEOCORPORATE RELATIONFINANCEOPERATIONHUMAN RESOURCEMarketing & SalesCorporate DevelopmentPublic RelationsFinance & AccountingControlling & SubsidiariesPurchasingFacility ManagementQuality ManagementAircraft MaintenanceAircraft Corp. ServiceAircraft Base MaintenanceAircraft SystemsInformation ManagementIndustrial RelationsHuman Capital ManagementTraining & Development

Company: Sepand Aircraft Engineering Sdn. Bhd., KLIA Sepang.Sepang Aircraft Engineering Sdn. Bhd. is subsidiary of Airbus SAS and part of Airbus Group. Established since 2006, the company is an EASA certified for Maintenance, Repair and Overhaul (MRO) for commercial aircraft, engines and components. Providing excellent support service for Aibus model aircraft in South East Asia Region is the companys utmost dedication.Government Partnership: Airod Sdn. Bhd., Subang Skypark.Wholly owned subsidiary of National Aerospace and Defence Industries (NADI), Airod is not only Malaysias top Maintenance, Repair and Overhaul (MRO) centre but also internationally recognized with world-class facilities to support fixed and rotary wing aircraft. Facilitated by excellence technical expertise for more than two decades resulting Airod being the pioneer in MRO industry in Malaysia. Currently servicing 33 countries and is one of the recognized brand in the international aviation industry.Staffing:i. Aircraft Techniciansii. Engineersiii. Admin & Support Hangar Facilities:i. Floor space 17,500 sqm equals to 4 baysii. Versatile aircraft docking systems; full access during service for aircraft technicians and engineers.iii. Workshops:a. Composite.b. Structure.c. Painting.d. Avionics.e. Life equipment.f. Battery.g. Engine test cell.Short Tem Objectives:To be the main hub for A400M service in South East Asia region.Long term Objectives:To be specialist service provider for rotary wing and tilt rotor wing aircraft.Become Fixed Based Operator (FBO) for A400M in Asia region

Main competitive advantageCompetitive advantage is defined as advantage that the company has over its competitors, allowing the business to generate more sales, retain or attract more customers. Types of competitive advantages are: Companys cost structure. Product / Service offerings. Network distribution. Excellence customer support.In this case, the company shall: Will cooperate with Airbus for MRO operations for A400M. Become the main supplier for raw materials of A400M in SEA region.

Other related business to ventureBy being the first MRO hub for A400M, the company could also become the main supplier for raw materials and components for A400M. the company could also become the consultant or reference centre for other country in SEA region for A400M maintenance training.

Business venture with other company; overseas or local.In order to market the business, we need to invest some money to make more money. Apart from investing on new equipment and excellence manpower, partnership with other company in similar business line could also be one of the approach to establish the business itself, especially in product is or service branding.In this case, Systematic Aviation Service Sdn. Bhd. is our main option for business joint venture. This is because SAS has developed its partnership in MRO with Royal Malaysian Police and Agensi Pengangkutan Maritim Malaysia. Since A400M aircraft is built for military, cargo and freighter use, it will be the right choice for APMM especially for any missionary or medievac mission.However, since the use of A400M aircraft is still not widely used by other SEA country which so far will be used by Malaysian Government, the possibility of competitor is insignificant. Although there is a possibility in the long run if other SEA or neighboring country would use the similar aircraft, the exclusive rights for heavy maintenance service in Part 145 repair station will be given to the company since we are the only entity being entrusted by the Airbus, the manufacturer of A400M.Despite of the exclusive rights given to the company, however for line maintenance of the aircraft, we are honored to be the main centre for training or consultation for any capable MRO company to conduct such training for their people.

CHAPTER 2The importance of vision and mission to the companyVision is mission is important to the company because it tells the direction of the company, where the company is going to be and what is its current status, is it in the right path in heading to its goal or not. The following are the importance of why mission and mission is important to the company: Defining the company on what they want to become. Defining the business reflecting the companys business. Distingusing the company from other similar enterprise. To effectively establish objectives and formulating strategy. Sometimes also called creed statement; a statement of purpose of the business, statement of belief, a principal. Defining on what the company wants to be and whom is their target customer.

Setting vision and mission of the companyVisionTo be the MRO hub for A400M in South East AsiaMissionPriority on safety and reliability assurance for our customer

Companys StakeholderStakeholder is defined as a party that has interest in the firm or project. There are three stakeholder groups:

Capital Market Stakeholder Shareholders and lenders expect the firm to preserve and enhance the wealth they have entrusted. Returnd should be commensurate with the degree of risk to the shareholder.Organizational Stakeholder Employees Expect a dynamic, stimulating and rewarding work environment. Are satisfied by a company that is growing and actively developing their skills.Product Market Stakeholder Customers Demand reliable products at low prices. Suppliers Seek loyal customer willing to pay highest sustainable prices for goods and services. Host Communities Want companies willing to be long term employers and providers of ax revenue whuke minimizing demands on public support services. Union Officials Want secure jobs and desirable working conditions.The following entity is our primary stakeholder in the company: The Governement of Malaysia under Ministry of Defense. Royal Malaysian Air Force (RMAF) nder Airod main customer cum partnership Khazanah Holdings investor Lembaga Urusan Tabung Haji investor Airbus material supplier Our dedicated employees.

CHAPTER 3The importance of external audits before business setupThe following are the main purpose of audit: To examine financial records and business transactions. To avoid conflicts of interest and ensure auditing process integrity. To ensure all related records are examined in an honest and fortnight manner. To protect shareholders and potential investors from occasional fraudulent. To ensure all transactions and financial records are genuine.

Companys external opportunities and threatsOpportunitiesThreats

Being the main MRO hub for A400M, therefore we will be the main focus from the Government of Malaysia for any future projects, development and R&D for A400M.A400M is still new. Therefore failure rate for the aircraft is high. Careful and thorough checking and inspection is required to identify any possibility of failure.

External forces that can influence operationsthe following are the external forces that can influence companys operations: Governement policies Ministry of Defence Regulations Stakeholders

I/O and its relation to the companyI/O is defined as a set economic theories that describe, explain and attempt to predict the nature of a firm in terms of its existence, behavior, structure and its relationships to the market. Such criteria are:

Potential Development of Substitute ServiceLine maintenance to be performed at competitors site.Upgrading facilities in other type of aircraft.Cabin interior modification for specific purpose.Bargaining Power of SupplierAvionic parts.Special equipment on instrumentation.Cabin interior mode.

Rivalry among Competing FirmsCurrently none.

Potential Entry of New CompetitorMAS Engineering.Lufthansa Technik Phillipines.Singapore Airlines.Bargaining Power of ConsumersThe Malaysia Ministry of Defense empower the quotation offer.The agreement between government and maintenance provider has certain limit in achieving the package of inspection offer.

Market commonality and resource similarity to MRO business competitorSo far, if thie company is chosen to perform MRO for A400M aircraft, it will be the only company that will provide such service and the only authorization being given from Airbus to do so in Malaysia and South East Asia region. For the next few years, existing MRO company will definitely react and try and work out to penetrate the existing market.The following entity are the possible potential company that will become our competitor: MAS Engineering Airod Sdn. Bhd. Lufthansa Technik, Phillipines Singapore Airlines

Future trends in MROOver previous decade, airline sector increas it fleet by additional of 5,172 aircraft and continue to grow by additional 3.1% over the next decade.Fleet growth occurred in smaller aircraft; narrow bodied and regional jets. The growth is expected to grow in region that is outside North American and Western European; which is in Asia market.Our current existing customer is from the Royal Malaysian Air Force. Our range of customer is expecting to expand to other govenrment agencies which also under Ministry of Defense, Malaysian Royal Maritime, Royal Malaysian Police for any missionary, troop move, cargo and machinery transporting which taking into the recent example of Lahad Datu incident and also not to be left behind Fire and Health Department for medievac usage. Finally the use of the aircraft also in any private sector that require cargo shipping which is the main design of the aircraft apart from its focus on military used.

EFE Matrix and CPM matrix of the MRO Company

Key External FactorsWeightRatingWeighted Score

OPPORTUNITIES1. Leader in A400M MRO.2. Flexible and highly committed workforce.3. Strongly supported by Airbus.4. Strongly supported by the Government of Malaysia.5. Partnership wih Airod.6. Directly employed expertise from Airbus.7. Financially supported by Khazanah and Tabung Haji shareholders.

THREATS1. New aircraft model infant stage which failure rate is still high.2. Newly setup operations may require very high capital investment to support operation cost.3. Costly R&D to ensure aircraft stability in the future.

CHAPTER 4Building distinctive competencies for the companyDistinctive competencies is defined as a competency or capability that a firm have which is unique to business organization. A competency that is superior in some aspect than other organization in similar business line; a core competencies or simply a competency.The company will embed Toyota Lean concept in its MRO operation. Lean system is a concept that applies the following elements in the process: Rule 1- All work shall be highly specified as to content, sequence, timing, and outcome. Rule 2- Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses. Rule 3- The pathway for every product and service must be simple and direct. Rule 4- Any improvement must be made in accordance with thescientific method, under the guidance of a teacher, at the lowest possible level in the organization.With the implementation of Lean into the operation will hopefully benefit the company to be effective and efficient in its operation and bring significant value not only to the customers but also to the stakeholders.

Resource Based View for the CompanyResource Based View (RBV) relations to the company determines which resources and capabilities result in which strength or weaknesses. Basically is what the firm owns or the assets that the firm has that will be fully utilized to capture the raging market.RBV can be divided into three groups as follows: Physical Facility, building, technology, companys physical assets. Human Resources manpower, expertise, experiences, technical skills, soft skills. Organizational Resources research and development, companys strategy / blueprint structure, partnership with other agencies.The following are the companys RBV:PhysicalHuman ResourcesOrganizational Resources

Airod facility state of the art hangar, workshops and other technical capabilities. Office building. Expertise directly from Airbus. Skilled workforce with numbers of experience in MRO operations. Research and Development directly supported by Airbus. Strong partnership with Government of Malaysia.

Marketing plan that is suitable for the companyAs explained earlier, currently there will be no significant competitor for the company and the exclusive rights for heavy maintenance of the aircraft will be given to the company. Therefore marketing plan to promote the service is somewhat not applicable. The A400M is an aircraft that designed specifically for military used. If other SEA or neighboring country decided to use the aircraft, it will be under military used. Unlike civilian aircraft, military used is not governed under common aviation regulations like IATA or ICAO. Military used aircraft is beyond borders and the agreement for servicing is between governments and international relations. So the most suitable marketing plan for the company is through operational partnership between government and any existing MRO around the region that wishes to explore the A400M maintenance. The benefit of the partnership will enable the company to gain such benefits: Risk / benefit sharing. Financial support in MRO activities / operations. Joint development in servicing strategy. Developing and enhancing good relationship between country.While for business partnership, should the company for example would like to cooperate with other available non government MRO company, it will provide the company with such benefits: To increase operational reliability of assets and create sustainable profits for both parties involved. Providing financial solutions, joint operations in research and development, technology to allow focus in continuous improvement of the core business.Such partnership will finally enable the company to cross-fertilization of the available technology that is available from its partner through long term relationship.

Market segment in the aviation industryMarket segmentation is defined as a group of people or entity that share one or more characteristics. Each market segment is unique and marketing managers decide on various criteria to create and capture their market target. Marketing also is about satisfying the customer. However customer has many characteristics, needs and expectations from the company. These characteristics are known as market segmentation.MRO is a huge set of aircraft maintenance and repair operations. Market segmentation in the area can be divided into the following category. Each category will address different needs of the aircraft service type.Airframe heavy maintenance Detailed inspection of airframe and components including any applicable corrosion prevention program and comprehensive structural inspection and overhaul of the aircraft.

Engine overhaul Off wing repair and replacement of parts to restore the engine to design operational condition, to guidelines established by the engine manufacturer. Typically the engine is disassembled, inspected, parts are repaired or replaced as necessary, reassembled and tested.Component MRO Maintenance, including repair and overhaul of aircraft components which provide basic functionality of aircraft components which provide basic functionality for aircraft flight including aircraft control and navigation, communications, control surface movement, electrical power and braking systems.Line maintenance Light, regular maintenance checks that are carried out to ensure the aircraft is fit for flight including troubleshooting, defect rectification, overnight maintenance and component replacement.

The importance of investment and financing decision for the companyInvestment and financing decisions require special attention due to the following reasons: They influence the firms growth in the long run. They affect the risk of the firm. They involve commitment in large amount of funds. They are irreversible, or reversible BUT with substantial loss. They are among the most decision to make, it will result to either the company will make it or break it.The effects of investment decision extend to the future and have to be endured for a longer period than the consequences of the current operating expenditure. A decision to invest in long term assets has decisive influence on the rate and direction of its growth. A wrong decision can lead to disastrous for the continuation survival of the firms. Unnecessary or unprofitable expansion of assets will result in heavy operating cost. On the other hand, inadequate investment in asset would make it difficult to the firm to compete successfully and maintain its market share.A long term commitment may also change the risk complexity of the firm. If the adoption of an investment increases, average gain but causes frequent fluctuations in its earnings, the risk level will increase. Thus investment decisions shape the basic character of the firm.Investment decision generally involve large amount of funds, which makes it imperative for the firm to plan its investment program very carefully and make an advance arrangement for procuring finances internally or externallyMost investment decisions are irreversible. In this situation, management by intuition does help the firm in making the decision. Finally investment decisions are the most difficult decision to make. They are assessments of future events which are very difficult to predict. The complexities of the decision making are influenced by economic, political, social and technological forces.

CHAPTER 5Penetrate new market deployment of action planFor the existing firm to sustain in the business in the long run, they cannot rely on the current market. In time, the market will become saturated; therefore it is important for the company to come out with a new plan or activity to increase current market share. It can be in a form of enhancing the current service, promoting new service with added value or volume discounts. However the purpose of the reason other than to expanding the current market share, it can also push the firm to: Improve service with focus on a niche market. Being innovative, radical or incremental enhanced version of existing service. The enhanced version of the existing service could compete with the existing product or attracting smaller segment of the existing market. Targeting on new geographical market for existing service. Existing market will usually mature at the home base. Company will usually look for outside for more lucrative market.

Employing horizontal integration which local companyThe chosen company for horizontal integration will be Systematic Aviation Service Sdn. Bhd. It is one of the earliest MRO Company in Malaysia that established in 1994. SAS also has partnership with Government of Malaysia under Royal Malaysian Police and Malaysian Maritime Agency which one of our potential customer in the future as explained earlier.

Market development which and why to pursueMarket development location will be at any third world country. The main reason are as follows: They have no expertise but they have strong funding backup oil. In exchange of their wealth, we can provide expertise and technology of A400M MRO. They have wide area of land, therefore the use of A400M is suitable for any use of transportation of machinery, troop move or any related necessary transportation using the aircraft. To expand from SEA market to Asia market.

Business diversifying whyThe possibilities of business diversifying in A400M are: Freighter /.cargo for private or corporate used; Pos Malaysia, FedEx, UPS, Tabung Haji, etc. taking into consideration of the main objective of the A400M purpose and its characteristic of cargo shipping aircraft. As one of the main objective of the company which is to provide service for tilt-rotor and helicopter. Being the sole distributor of A400M materials and components. Becoming the training centre for line maintenance.

Cost leadership strategyBased on the Porters Five Generic Strategies, the company shall apply Type 5 which is Focus best value. This is because the A400M is a new aircraft model with very high possibility of failure rate. This is according to the bath tub graph in reliability engineering. Therefore the company really needs to focus on the failure possibility in the aircraft. Finally the best value is applicable because the aircraft is still new and have active warranty on its components.

CHAPTER 6Opportunities and threats from external environment to the new companiesOpportunitiesThreats

Strong government support. Strong support from Airbus, the manufacturer of A400M. Main reference or centre for any external MRO from other country to perform maintenance for A400M. Potential competitor from neighboring country or any SEA country to do their own A400M MRO once the aircraft is established or reached its maturity.

Required strengths that the company must have to compete with other companies in the regionIn order for the company to sustain in the long run, the following strengths must be nurtured. Once it has officially become the companys strengths, it will not only help the company to sustain, but also contribute to the companys growth: Continuous technology research and development with Airbus and/or any other MRO company. Strong partnership with suppliers. Establishment of Toyota Lean concept in the operation system that will result to zero defect and excellent service delivery. Having expertise in the sector Airbus engineers / years of experience with any established MRO.

Competitive and aggressive strategies that can be adopted to be the market leaderAlthough undeniably that the company will be the market leader for the business with all the privilege that is being given, it is still important for the company to have its own plan to capture bigger market sector and consequently becoming the main hub of MRO for A400M in Asia for example.In this section, the company could apply the following strategies for the above reason: Horizontal integration buying Systematic Aviation Systems Sdn. Bhd. Market penetration research and development with other MRO company, IT provider; IBM for service quality enhancement. Business diversification venturing on freighter or cargo business; Lembaga Urusan Tabung Haji, Pos Malaysia or any private corporation. Market development being the training provider for A400M line maintenance. Service development subsidizing the service according to market segmentation providing preventive servicing maintenance program for optimizing operation of the aircraft.

CHAPTER 7The use of financial, physical, human and technological resources to be wisely developed and balanced in order to ensure high ROI to investors.Resource allocation of the above elements will be evenly distributed to allow strategy execution. It is part of the management activity that is centralized. Finance

Financial support from shareholders; Khazanah Holdings, Lembaga Urusan Tabung Haji. Financial support from benefactor; Airbus. In the long run to invest and venture on cargo / freighter service.

Physical

Partnership with other military around SEA region. Expansion plan market to Asia region South Africa building partnership and international relations. MRO market segmentation through subsidiary establishment to focus more on the type of customers need.

Human

Having expatriates from Airbus to work with the company. Sending all technical employees for intensive training of A400M with Airbus and secure them with contract bonding agreement from being head hunted by the competitor. Establish employee empowerment to build high morale among employee towards the company. Strong compliance on safety regulations.

Technological

Employ hi-tech software tools for operation quality enhancement under IBM, Oracle, etc. Develop R&D with other MRO company (Lufthansa Technik) for product reliability. Investment on state of the art technology in operations.

Human capacity building and expertise to be planned as part of strategiesThe company shall implement the following plan for human capacity building and expertise as part of the strategies: Human resource development, the process of equipping individuals with the understanding, skills and access to information, knowledge and training that enables them to perform effectively. Organizational development, the elaboration of management structures, processes and procedures, not only within organizations but also the management of relationships between the different organizations and sectors (public, private and community). Institutional and legal framework development, making legal and regulatory changes to enable organizations, institutions and agencies at all levels and in all sectors to enhance their capacities.

Type of technological resources that the company must have in this business lineContinuous support and guarantee by manufacturer of Airbus in providing documentation of organization maintenance and check package in complying with the usage of aircraft, especially for military usage and utilization. Component such as avionics equipment required special services and care during ____ check.

CHAPTER 8Type of marketing strategy best employed by the companyThe purpose of marketing is to ensure sustainability of the business and also to expand the current market before it became saturated. As explained earlier, A400M main usage if for military used therefore the best marketing strategy is through government diplomacy between neighboring country and SEA country that use the similar type of aircraft.

Purposed based marketing in the context of the case studyAs pioneer of A400M MRO provider, this is an indirect publicity and promotions to the user of A400M. The exclusive right design for any company willing to send the aircraft for maintenance purposes.

The importance of market segmentation in MROThe importance of market segmentation in the business is to break down the huge MRO operations into smaller segment so that it can focus to a different set of customer based on their needs and requirements.In the long run the company shall established subsidiary according to market segment so that each area can focus on their own operations. It is also a way in entrusting the people through empowerment for any decision making, financial and other operations requirement.

The importance to have strong cash flow and good financial backup during the start of businessAny company during an initial stage does not have any income for its operations. The whole operation expenses from purchasing raw materials, marketing, paying the wages and so on rely solely on the startup capital. Within the next financial year, a companys revenue does not usually paid off to cover up all of its operation expenses. Here is why the company really needs to have strong cash flow and good financial backup during the start up of the business. It is to ensure that the company has a good allocation of funds to cover up all its expenses while it reach its maturity stage in years to come.

CHAPTER 9The importance of reviewing strategies at each financial yearThe main purpose of strategy in business is as a way or a method for a company to capture the market. However along the way, external change does affect the strategy that is being set up. The changes are; political, economy, regulations, society, stakeholders, customers, shareholders and so on. Therefore it is important for the company to review its strategies to ensure that the company is in the right path in achieving its current mission and if the company somehow deviated from its path due to the external factor, other strategy that is suitable with current situation will be implemented to suit the current customer and market needs and trends.

Contingency plan if the initial strategies failed to achieve its objectivesContingency plan is defined as alternative plan should the current ongoing plan does not result as expected. Although we may have meticulously and carefully plan the strategy but nothing can ever guarantee the result. However, analysis on current situation of internal and external factor may help in determining the best strategy for the company. As explained earlier, each market segment of the MRO operations other than heavy maintenance will be operated by the subsidiary. This early strategy will reduce the risk of balancing the revenue with any unprofitable or less profitable operation. By allowing the smaller segment of the market to be run by the subsidiary will enable the employee empowerment towards operational decision making.Our last resort should the earlier strategy failed to work, selling any unprofitable subsidiary to cover current losses, however before deciding to sell, the company must determine early warning signals of the occurrence.

The importance of Balanced Scorecard for the companyBalanced Scorecard is one of a tool used in a company to evaluate current strategy that allows the evaluation being carried out from four main perspectives; financial performance, customer knowledge, internal business processes and learning and growth. Bu using these four perspectives will enable the company to analyze current situation of each perspectives and seek answers to these following questions: Companys improvement and its value innovation, technology, leadership, product/service quality, process efficiencies, etc. Improvement and sustain upon core competencies and competitive advantages. Customer satisfaction.

CHAPTER 10The importance of ethics in running MRO businessOne of the key competencies in successful business is by having good ethics. Good ethics can be defined as value added element in any organization. Its a principle that every employee in the organization must have and have it applied. For example, a quotation by famous American author, scientist, ecologist and forester, Aldo Leopold:Ethical behavior is doing the right thing when no one else is watching- even when doing the wrong thing is legal.Safety and quality in MRO industry is never compromised. Those are two most important and crucial thing guarantee airworthiness that any overlooked often lead to deadly mishaps. To ensure both safety and quality in MRO operations complied by each and everyone is by embedding good ethical value.However good ethical value does not developed overnight. It is a structural core values that is embedded through everyday practice which finally leads to companys culture. Safety culture can be defined as follows:Safety Culture is the set of enduring values and attitudes regarding safety issues, shared by every member of every level of an organisation. Safety Culture refers to the extent to which every individual and every group of the organisation is aware of the risks and unknown hazards induced by its activities; is continuously behaving so as to preserve and enhance safety; is willing and able to adapt itself when facing safety issues; is willing to communicate safety issues; and consistently evaluates safety related behaviour.The following are sample of nature of indiscretion which leads to stern action: Sabotage / malevolent damage. Failure to report known unsafe act. Failure to cooperate in investigation. Under the influence of alcohol / drugs. Reckless violation. Intended negligence error. Multiple acts of negligence error.Therefore having the best strategy is not enough if it the employee fails to practice good ethics. It is two elements that will complement each other; strategy and good ethics.

Performing CSR as part of its commitment in doing business examples In a way to promote work and life balance, the company will be one of the sponsors for Reebok Obstacle Run that will be held each year in May. The purpose of being the main sponsor is to promote healthy lifestyle to all employees as well educating the public about healthy lifestyle. Participating in an event for Corporate Social Responsibility (CSR) is also part of the marketing strategy by the company. It is a relationship between the company and the public. It demonstrates the companys awareness on current situation of any local issues and concern and how the company plays it role in triggering changes in the society towards the current issues. For example, current obesity statistic in every Malaysian is increased each year. The companys employee could be one or more who contribute to the statistic. Being in the MRO industry require a person who is physically fit and healthy because it require concentration, focus, awareness and proactive. As a result, the company will not only being the main sponsor for Reebok event, but also looking forward to be one of the main sponsor in any major running event; Salomon, Milo Breakfast Day, Malakoff, Off-Road Challenge and so on.

Environment sustainability is crucial to ensure that the company is green. Measures to be taken to make it stand reality.MRO going green in the benchmark of European country is really concern on the environment issue. One of the main contributors of the carbon and green house emission is deniably, is the airline industry thus leads to climate change. Apart from saving the environment, the increasing cost in fuel is one of the main reason current MRO sector has to consider for fuel alternative that is more environment friendly.Current research has proven that the use of biofuel is environment friendly and it has been successfully tested widely on cars, trucks and other machinery. Unfortunately for aviation industry the use of biofuel is still in the experimental process. The characteristic of biofuel is easily derived, readily biodegradable, relatively safe and most importantly reduce most production of CO2. This is because the emissions from aircraft is much more harsher compared to land transport due to the high altitudes at which they operate.Although the use of biofuel in the aviation sector is still at the experimental stage, there is no excuse for the MRO sector to disregard the operations impact to the environment. Initiative in implementing the Lean System in the operation is the first step for the company in going green. Lean production techniques often create a culture of continuous improvement, employee empowerment, and waste minimization, which is very compatible with organizational characteristics encouraged underenvironmental management systems (EMS)andpollution prevention (P2).Finally the compliance in Environment Safety is a must. The company will work closely with Department of Environment and seek continuous support in handling harmful chemical and substance and disposing them safely and appropriately.