ANDREW DOYLE / SINGAPORE
The 2004 expiry date looks likely to be stretched if a feasibility study is favourable
Lufthansa Teknik and Air China are close to reaching an agreement on prolonging their Beijing-based Aircraft Maintenance and Engineering (Ameco) joint venture beyond 2004, when the existing co-operation deal is due to expire.
"The joint venture extension discussions with Air China are going well," says Ameco general manager Walter Heerdt. "The duration for the second period depends on the results of our feasibility study, which is now in its final preparation. However, it is too early to talk about a date for the signature of the agreement," he says.
Ameco was set up in 1989 under the terms of a 15-year contract and is 60%-owned by Air China with Lufthansa holding the balance. The German flag carrier's commitment to the successful venture helped it secure a sought-after codeshare deal with China's principal international carrier late last year, raising speculation that it will eventually join the Star Alliance.
Lufthansa has previously expressed an interest in expanding its shareholding in Ameco, possibly to 50% or more.
While Air China currently provides more than 60% of Ameco's work in terms of sales, Heerdt would like to see this reduced to 50% by 2003 by building up its activities in the higher yield third-party market serving foreign airlines. Other Chinese airlines account for about 20% of sales.
Ameco is also keen to break into the passenger-to-freighter aircraft conversion market with the 737 Classic - the most widely used type in China - seen as the most likely candidate. China requires a large number of additional cargo aircraft to support its rapid economic expansion.
The ongoing consolidation of China's airlines into three main groupings is likely to trigger a rationalisation of aircraft types, although it remains unclear exactly what form this will take and in which way maintenance providers will be affected.
Meanwhile, Lufthansa Technik is expanding its presence elsewhere in China, having earlier this year announced plans to set up an airframe component maintenance joint venture in Shenzhen with a pair of local companies. It will focus on repairing wheels and brakes.
Source: Flight International
