China Southern Airlines is reviewing plans to invest in an engine test and overhaul facility while it considers separate joint venture proposals from MTU and Sochata. SR Technics, in the meantime, is pursuing a maintenance joint venture with China Eastern Airlines, as Hong Kong Aircraft Engineering (HAECO) and Shandong Airlines begin a study into a new narrowbody aircraft facility.
MTU of Germany and Snecma subsidiary Sochata have entered into separate talks with China Southern to establish a new engine support partnership in Guangzhou. The proposals are seen as an alternative to the carrier's joint venture, Guangzhou Aircraft Maintenance Engineering (GAMECO), which is also planning investment in its own independent propulsion centre.
China Southern, with its two GAMECO partners Lockheed Martin and Hutchison Wampoa, had been planning to invest $108 million in the centre. This has since been revised down to $60 million because of concern over the health of the local air transport market and the centre's projected losses during a mandatory first five-year period of depreciation.
The GAMECO Propulsion Centre is now on hold pending a decision by the airline's board. China Southern is initially looking to establish a CFM International CFM56 and Rolls-Royce RB211 support capability. This would latter be expanded to include the International Aero Engines V2500 and possibly General Electric's GE90 series.
Swissair engineering subsidiary SR Technics is hoping at the same time to move forward shortly with longstanding plans for a maintenance joint venture with China Eastern. The two airlines have co-operated closely since 1989, performing heavy C and D checks on Airbus A300s and Boeing MD-82s and MD-11s. It is understood that discussions have been complicated by the Shanghai carrier's insistence on management control.
Elsewhere in China, Shandong Airlines and HAECO have entered into a feasibility study to establish the country's first narrowbody aircraft maintenance joint venture.
Source: Flight International
