China's - Orient Aviation

SPECIAL REPORTMaintenance, Repair and OverhaulU.S. focus on China MROsRace is on to complete major hangar projectsAmer ic a n c a r r ie r s w i l lincrease the outsourcing ofheavy maintenance to Asiaand in particular to the bigspecialists in China, saycompany chiefs. However, the growth inbusiness may be restricted by shortage ofcapacity, in the near term at least, as a numberof major hangar construction projects are inthe pipeline.Ameco Beijing is currently carrying outheavy checks for United Airlines’ full B777fleet, with up to 80 likely to be handled overfive years. It is actively seeking similar workfrom elsewhere, the company said.Hong Kong Aircraft Engineering Co(HAECO), meanwhile, was signed upearlier this year by Delta AirLines to take over work on aportion of its B767 fleet afterthe U.S. carrier scrappeda deal with an Air CanadaTechnical Services unit oncost grounds.Ameco, a joint venturebetween Air China andLufthansa Technik, is dueto commission the biggestaircraft maintenance hangarin Asia – capable of handlingsix widebodies and fournarrowbodies at the sametime – at Beijing CapitalAirport next March. It has permission tobuild another of the same size. Some 60% ofits current work involves Air China’s fleet.“Once we open the new hangar we candouble our capacity,” said executive director,Harry Seeger.“We see an increasing trend for [U.S.airlines] to look for cost-optimised suppliers.When you see a carrier with fleets of 50, 80or 100 aircraft going for long-term contracts,that’s very attractive for us.”The general agreement with United isopen-ended, meaning more aircraft maycome into the picture. But the deal on aircraftnumbers as such only runs to 2009 and theAmerican carrier, which emerged frombankruptcy protection last year, has notdrawn up plans for beyond that date.The arrangement has more significancethan the considerable amount of moneyinvolved. “United is our showcase,” he said.“They have brought us more and more work.We keep contact with a lot of other legacycarriers of a similar size. We cannot do asmuch as we would like this year becausethere is still a capacity issue.”A meco, which has t raditionallyconcentrated on Boeing aircraft, is now addingA340 capabilities to its list of services.Delta has hired HAECO to handle heavywork on 11 of its B767s, continuing a trendthat has seen the Hong Kong company carryout maintenance for Continental Airlines,Northwest Airlines and UPS.Eventually there will be work on moreAmeco Beijing: could handle up to 80heavy checks of United Airline’s B777fleet over five yearsthan 200 B757s and B767s up for grabs afterDelta pulled out of a five-year contract withACE Aviation Holdings’ maintenance unitin Vancouver three years early.“We are not in a position to meet Delta’scost expectations,” ACE chief executive,Chahram Bolouri, said in a statement at thattime. More than 700 of ACE’s 1,000 workerslost their jobs as Delta began drawing upnew contracts with HAECO and two U.S.providers.Charles Bremridge, HAECO’s chiefoperating officer, views this as part of agrowing trend. “The tendency to outsourceby U.S. carriers that we have seen over thepast three years still continues,” he said.“They see they can obtain savings in termsof costs, but keep or even exceed the qualitythey are used to receiving while gettingon-time delivery in a regular fashion.“A number of U.S. carriers have beenpleased to discover they can find this sortof alternative. Some of them are very big.They are still going through the process ofevaluating alternatives.”HAECO, however, is not rushing theprocess. It opened its second hangar latelast year and has plans for another. Itssister company, Taikoo (Xiamen) AircraftEngineering Co (TAECO), is currentlybuilding its sixth hangar.“We need to do a good job for them,rather than expand wildly and run the riskof messing things up,” said Bremridge. “It’sa business that hopefully will continue togrow. It’s one we are keento expand. At the moment,however, our capacity to takeon more business is relativelylimited. We are very full.”Joey Lo, commercialdirector at GuangzhouA i rcraf t Mai nt e n a nceEngineering Co (GAMECO),forecasts f u r ther workfrom American airlineswhen those coming out ofbankruptcy protection lookto upgrade their cabins.China’s MRO shops stand tobenefit. “That could bring inanother lock-in business,” he said.For now Lo sees traditional heavy work asa draw, despite capacity problems. “Foreigncarriers have more and more flights into China.It’s an obvious choice to dump aircraft in thecountry for heavy maintenance,” he said.China’s own growing fleets are takingup a lot of room and hangar expansions arenot keeping pace, said Lo. GAMECO hasplans for another alongside its new, 28,000sq. metre facility at Baiyun internationalairport, for which ground will be broken atthe end of the year.GAMECO has held fire for a whilebecause of the high cost of steel in the wakeof demand caused by the Beijing Olympics.“It takes time to invest in new hangars,”said Lo.48 ORIENT AVIATION NOVEMBER 2007