Singapore Airlines (SIA) subsidiary SIA Engineering has sold its 5% stake in Taikoo (Xiamen) Aircraft Engineering (TAECO) to Hong Kong Aircraft Engineering (HAECO) for $7.5 million.
Although it did not give a reason for the sale, the TAECO joint-venture agreement requires a shareholder to provide a minimum amount of heavy maintenance work for the company based on the size of its stake. Industry sources say the SIA subsidiary was not meeting minimum requirements.
SIA Engineering, which plans to compete with TAECO in converting Boeing 747-400 passenger aircraft into freighters, owned 9.09% of TAECO until early 2001, when it sold 4.09% to HAECO. At the time it acknowledged it was performing more maintenance work internally and had reduced its workload contribution to TAECO.
HAECO was already the biggest single shareholder in TAECO before the purchase of SIA Engineering's shares, with a 49.55% stake. Other shareholders are Boeing, Cathay Pacific Airways and Japan Airlines with 9.09% each; Xiamen Aviation Industry with 10%; and Beijing Kailan Aviation Technology Development and Service with 8.18%.
TAECO is one of the largest maintenance, repair and overhaul companies in China. Its main competitors are Ameco Beijing and Guangzhou Aircraft Maintenance and Engineering.
NICHOLAS IONIDES / SINGAPORE
Source: Flight International
