ST Engineering’s Commercial Aerospace business and SF Airlines have agreed to set up a commercial airframe MRO joint venture (JV) in China.
Subject to regulatory approvals, the JV will operate a greenfield airframe MRO facility at the Ezhou Huahu Airport, which is designated as Hubei’s international logistics hub airport.
With passenger and air cargo traffic growing steadily as China re-opens its flight connectivity, the partners said the JV would not only support the freighter MRO demands of SF Airlines, which is China’s largest freighter airline in fleet size, but also serve the increasing needs of other cargo and passenger airlines operating in the region.
ST Engineering will have a majority 60 per cent stake in the JV, with the remaining 40 per cent to be held by SF Airlines. The JV company’s first facility is expected to be ready in 2025.
The partners also noted that MRO demand in China and the Asia Pacific region is estimated to increase at a compound annual growth rate of about three to seven per cent over the next decade according to industry forecasts. ST Engineering said the strategic collaboration would allow it to capture “new and rising opportunities in a high-growth region”.
“The establishment of the MRO joint venture with ST Engineering, which is the largest airframe MRO provider in the world with over 45 years of experience in the industry, will make up for our airframe maintenance capability,” said SF Airlines’ chairman Li Sheng. “Given the huge aircraft maintenance market in Ezhou hub, sincere cooperation with ST Engineering and strong support from the government, I have full confidence in the development of the joint venture.”
ST Engineering’s commercial aerospace president Jeffrey Lam commented: “This is an exciting development for us given that China and the Asia Pacific region are key markets for ST Engineering’s Commercial Aerospace business. With the strengthening of our commercial aerospace network in China, we will be able to better meet the growing needs of airlines in the region, providing them the capacity and flexibility that come with greater choice of locations.
“Our MRO expertise and years of experience in China, combined with this strategic collaboration with SF Airlines which is also the anchor customer, will be strong factors contributing to the joint venture’s success.”
