General Electric Engine Services is focusing efforts on firming up planned new engine-overhaul joint ventures in China and the Philippines, following the recent start of its partnership with EVA Airways in Taiwan.
GE has confirmed that it has signed a memorandum of understanding (MoU) with Xiamen Aviation Industrial to establish an initial on-wing engine support centre in southern China.
The company is now seeking to attract other investors, with the intention of developing the proposed Xiamen site.
"We would start with on-wing support, which is needed today. This is a good way to put your toe in the water. Our vision would be to establish a CFM International CFM56 overhaul shop in Xiamen, with equity participation from several airlines," reveals GE Engine Services president Bill Vareschi.
The planned venture would be modelled on the adjacent Taikoo Aircraft Engineering site, but is targeted primarily at domestic Chinese airlines taking a 10% or larger stake in the business. "Our role there is to broker a deal. GE doesn't have to be the majority partner," adds Vareschi.
GE is also negotiating with Philippine Airlines (PAL) to take a 40% stake in a new overhaul company to support CF6-50/80s. The two companies have already signed an MoU and hope to finalise the deal within the next three months.
PAL has also been engaged in on/off talks with Lufthansa Technik on a wider ranging joint venture arrangement, which would encompass airframe maintenance and repair, as well as engine overhaul. GE and Lufthansa have said that they view the other as competition and want exclusivity with PAL. The alternative is to expand GE's EVA joint venture "at a greater rate", says Vareschi. Under its recently concluded deal with the Taiwanese carrier, GE is investing $20 million to take a 20% stake in Evergreen Aviation Technologies.
GE wants to transfer Asian airline CF6 work from its overhaul plants in the USA and Scotland to Taiwan and the Philippines, to relieve demand on capacity. The company has also invested $50 million in its new Aero Engines Repair and Overhaul joint venture with Malaysia Airlines, which is specialising in CFM56-3 and Pratt & Whitney PW4000 work.
Source: Flight International
