Paul Lewis/SINGAPORE
Rolls-Royce is in discussions with Swissair and Lufthansa to form a new tripartite engine repair and overhaul facility in Europe as plans to establish a similar joint venture with Singapore Airlines (SIA) have slowed in the face of Asia's economic crisis.
The UK engine manufacturer is understood to be talking to the two European carriers to provide after-sales support for the 20 R-R Trent 500-powered Airbus Industrie A340-600s they recently ordered. The new venture would complement R-R's other joint ventures, Hong Kong Aero Engine Services (HAESL) and Texas Aero Engine Services (TAESL).
"There is talk of a joint venture in Europe," acknowledges Ian Lloyd, R-R aero repair and overhaul managing director, while refusing to talk about specific airlines. "The actual structure of each joint venture is probably different. The concept of partnering with customers is the model," he adds.
In 1996 R-R joined Cathay Pacific sister company Hong Kong Aircraft Engineering to form HAESL and, more recently, partnered with American Airlines to open TAESL. The two 50:50 joint ventures were established on the heels of Trent 700 and 800 sales to the two carriers, but will initially service other types, such as the RB211, Tay and the International Aero Engines V2500.
"Looking forward, we've divided the world into three. There is Asia-Pacific, covered by HAESL, and the new Singapore joint venture. We've got America covered by TAESL and then you've got Europe," says Lloyd. The planned partnership with SIA, in which R-R will have a 30% stake and HAESL 20%, has yet to be finalised.
When announced as a memorandum of understanding in February, the original agreement called for the joint venture to be operational by 2000. This has slipped to 2002, as SIA has cut back on deliveries of Trent 800-powered Boeing 777s. Sources suggest the scope of the proposed venture may be refocused towards supporting SIA's recently ordered Trent 500s, with more 800 work going to HAESL.
The proposed European venture would complement R-R's expanded UK repair and overhaul facilities, which will maintain and support British Airways' newly ordered batch of 16 Trent 800-powered 777s. "We sold BA a total care package," notes Lloyd.
British Airways' internal newspaper reported earlier this month that the deal includes 20 years of maintenance, the supply and cost of spares and performance guarantees, including extended range twin-engined operations capability and engine shut-down rates.
In the longer term, R-R views its expansion into engine repair and overhaul as only the first step in a wider move to develop value-added services. Other possibilities under consideration include engine leasing, package support for auxiliary accessories and on-wing hospital shops, adds Lloyd.
Source: Flight International
