China remains a hotbed for MRO JVs

Despite the global slowdown, China remains a hotbed for maintenance repair and overhaul joint ventures as Chinese airlines expand their fleet.

Some Chinese airlines may be parking older aircraft due to the global financial crisis which has slowed both the cargo and travel industry, but this has not thrown a spanner into the interest of foreign OEM’s or MRO companies seeking topartner Chinese carriers.

According to an official of the Civil Aviation Administration of China (CAAC), the number of foreign firms in talks with local companies to set up joint ventures (JVs) continues to grow.

Currently there are more than 15 MRO JV companies in China. This includes Taikoo (Xiamen) Aircraft Engineering Co (TAECO), Beijing-based Aircraft Maintenance Engineering Co, Shandong TAECO Aircraft Engineering Co, Guangzhou Aircraft Engineering Co, GE Engine Services (Xiamen) Co and Boeing Shanghai Aviation Services (BSAS). In Hong Kong, the Hong Kong Aircraft Engineering Co. Ltd. (HAECO) provides base and line maintenance while Hong Kong Aero Engine Services Ltd. (HAESL) undertakes engine maintenance.

BSAS currently leases a bay from Shanghai Airlines to carry out its services. Its hangar which is currently under construction will be operational next year. It will have four bays offering MRO services including modifications.

In its 2008 Current Market Outlook Report, Boeing projected that China would require 3,710 new aircraft by 2017. Chinese airlines currently have 1,210 aircraft in operation. Traffic is expected to grow at the rate of 7.3 per cent over the next 20 years and the market for MRO services to grow in parallel.