Malaysia Aviation Group (MAG) has signed a sale and purchase agreement with Airbus to acquire Sepang Aircraft Engineering (SAE), a wholly owned Airbus Group subsidiary, with completion targeted for 2027 pending regulatory approval.

The deal, announced on October 1, 2026, forms part of MAG's Long-Term Business Plan 3.0 (LTBP 3.0). The group did not disclose financial terms.

MAG frames the acquisition as a deliberate push into the maintenance, repair and overhaul (MRO) market. The company wants to strengthen its engineering and maintenance capabilities, broaden its integrated aviation services portfolio, and grow revenue from third-party customers beyond its own airline operations.

A disciplined bet after a volatile year

MAG President and Group Chief Executive Officer Captain Nasaruddin A. Bakar said the acquisition follows a difficult year for aviation, marked by a shifting global environment and volatile fuel prices. He said the group is prioritizing disciplined investments in areas with a clear path to long-term value, focusing on opportunities that reinforce its core businesses and diversify revenue.

"The proposed acquisition reflects this approach," he said, adding that it builds on MAG's existing engineering and maintenance base and positions the group to capture opportunities in a growing MRO market.

The strategy matters for a group that has historically depended on its airline operations for the bulk of its income. Third-party MRO work offers a revenue stream less exposed to fuel prices and demand swings, and Southeast Asia's narrowbody fleet growth has kept maintenance demand tight across the region.

What SAE brings to MAB Engineering

According to MAG, SAE will complement the capabilities of its existing MRO arm, MAB Engineering. SAE contributes Airbus A320 expertise, a dedicated paint hangar and specialized component repair services, along with technical, operational and quality standards developed under Airbus ownership.

The combined capabilities are expected to allow MAG to offer a wider range of MRO services to existing and new third-party customers in ASEAN and beyond. For MAB Engineering, the acquisition adds Airbus-trained engineering depth and paint-shop capacity — a service line that is capacity-constrained across the region.

Nasaruddin also pointed to Malaysia's cost-to-skill advantage and engineering expertise as factors supporting the country's ambition to become a leading regional aerospace hub.

Regulatory path ahead

MAG said the transaction remains subject to customary conditions precedent, including approval from the Civil Aviation Authority of Malaysia (CAAM). The group plans to work with SAE, CAAM and other stakeholders to secure the required approvals, with completion targeted for 2027.

Until regulators sign off, SAE remains an Airbus subsidiary in operational terms, and MAG's expanded third-party MRO ambitions stay prospective rather than contracted. If the deal closes as planned, MAG will enter 2027 with a broader service portfolio at a time when ASEAN carriers face growing maintenance backlogs and competition for hangar slots.