BEIJING - US aircraft
manufacturing giant Boeing has set up China's
first foreign-controlled aircraft maintenance,
repair and overhaul (MRO) joint venture in
Shanghai.
The new facility, in which
Boeing holds a 60% stake, represents the first
time that the US aircraft manufacturer has ever
taken a controlling share in an MRO joint venture.
Shanghai Airport Authority (SAA) and Shanghai
Airlines hold the remaining 25% and 15% stakes
respectively.
The joint venture, called
Boeing Shanghai Aviation Services Co
Ltd,
is not only expected to allow Boeing to capitalize
on the booming aircraft MRO market in China, but
will also help build Shanghai into an
international aviation hub by 2010.
"Working together, we are taking the first
of many steps toward offering our airline
customers the services that will help them safely
and efficiently expand, while keeping pace with
the tremendous growth in commercial aviation that
we see in China over the next 20 years," Scott
Carson, president and chief executive officer of
Boeing Commercial Airplanes, said at the
groundbreaking ceremony of the MRO plant on
Tuesday.
Construction of the plant, which
requires a total investment of US$103 million,
will take up to two years to complete. It will
have a four-bay hangar, with each one capable of
housing wide-body aircraft.
The plant, at
Shanghai Pudong International Airport, will
perform Boeing's passenger-to-freighter
conversions, upgrades to aircraft interiors,
avionics and entertainment systems, as well as
line maintenance and heavy maintenance checks.
The Shanghai facility is likely to become
a major base for Boeing to convert 767-300
passenger jets into freighters.
Boeing
launched the 767-300 conversion program last
year, and has so far received five orders from All
Nippon Airways. The first converted freighter will
be delivered in early 2008.
Boeing
forecasts that, over the next two decades, 75% of
freighters will come from conversions and only 25%
will be new ones.
Converted freighters are
a cost-efficient solution for airlines to increase
air cargo capacity, as conversion increases the
value of existing aircraft and gives airplanes a
new lease on life.
Boeing launched the
747-400 conversion program in January 2004. It
has received 36 orders and delivered five
converted jets, with conversion undertaken by
Taikoo (Xiamen) Aircraft Engineering Co Ltd. The
company, in which Boeing holds a 9.09% share, is
located in Xiamen in eastern China's Fujian
province.
Boeing said it would probably
feel a temporary impact from Airbus' delayed
delivery of the A380 superjumbo because airlines
are reluctant to give up their capacity by
converting existing 747-400s into freighters "as
early as Boeing has anticipated".
"But I
believe that is just short-term. The market demand
for conversion will remain robust in the long
term," Carson said on Monday after arriving in
China.
This is his first trip overseas
since he took up the post at the beginning of last
month after former CEO Alan Mulallay left for Ford
Motor Co.
"With
the market demand for aircraft
MRO increasing rapidly, the joint venture will
certainly have a promising future," said Li Derun,
SAA's executive vice president.
"It
is also necessary for Shanghai to have a
world-class, high-quality MRO plant if the city is
going to become an international aviation hub," Li
said, adding that the plant would help Shanghai
attract more airlines.
Menawhile, a new
Boeing report says that China's airline operators
plan to spend US$280 billion to purchase 2,900 new
aircraft over the next 20 years.
By 2025,
China will become the world's fastest-growing
airplane market and the world's second biggest
civil airplane market after the United States, the
report said.
With the rapid expansion of
the travel and cargo market, the number of
airplanes in China is projected to quadruple to
3,900 in 2025.
Randy Baseler, vice
president of Boeing Commercial Airplanes,
estimated that the aviation market in China will
expand at an annual rate of 9% in the coming
years.
