SSEK Law Firm Assists Angkasa Pura Properti with Development of Aircraft MRO Facility at Bali Airport

SSEK Law Firm has assisted PT Angkasa Pura Properti (“APP”) with the conclusion of a Cooperation Agreement for the development of a 17,000-square-meter aircraft Maintenance, Repair and Overhaul (“MRO”) facility at I Gusti Ngurah Rai International Airport in Bali between APP and PT Avia Technics Dirgantara (“FLT”). FLT is the Indonesian subsidiary of FL Technics, the world’s largest aircraft, crew, maintenance, and insurance provider, headquartered in Lithuania and having more than 180 aircraft in its fleet.

SSEK also assisted in the conclusion of a Land Lease and Revenue Sharing Agreement between the joint operation and PT Angkasa Pura I (“AP I”) to facilitate the MRO facility development.

This MRO facility at I Gusti Ngurah Rai International Airport is expected to bring world-class aircraft MRO services to Bali, catering to the significant increase in the number of direct international flights to the island. The MRO facility development has an estimated investment value of USD 30 million and is expected to help boost Bali’s economy and help develop I Gusti Ngurah Rai Airport as an international hub not only for flights, but also for aircraft MRO.

The signing of the Cooperation Agreement and Land Lease and Revenue Sharing Agreement took place in Jakarta on August 11, 2023, and was attended by, among others, the President Director of APP, Ristiyanto Eko Wibowo; the Director of Commercial and Services at AP I, Dendi T Danianto; and the President Director of FLT, Martynas Gigas.

Under the Cooperation Agreement, APP will develop the hangar required to house the MRO facility, while FLT will act as the operator of the MRO services once the facility is complete. Under the Land Lease and Revenue Sharing Agreement, APP and FLT, acting together, will lease and share revenue with AP I in exchange for the use of the space at I Gusti Ngurah Rai International Airport.

SSEK played a critical role in advising APP on the negotiation, drafting, and finalization of the Cooperation Agreement and the Land Lease and Revenue Sharing Agreement. The SSEK team working on the transaction was led by partner Dewi Savitri Reni, with senior associate Aldilla Stephanie Suwana and associates Rafi Adrian Rahadi and Tengku Adika Suryatama.