Guangzhou, the latest entrant into the mainland's rapidly growing aircraft maintenance market, aims to become the largest player in the field, having just set up a joint venture with a Singapore company.
The facilities of the ST Aerospace (Guangzhou) Aviation Services Company Limited, a joint venture between Guangdong Airport Management Corporation (GMAC) and Singapore Technologies Aerospace, are expected to become operational in 2013.
GMAC holds 51 per cent of the joint venture with Singapore Technologies. The new entity will perform commercial aircraft maintenance, repair and overhaul - or MRO, as it is called in the industry - for Airbus, Boeing and McDonnell Douglas aircraft.
According to GMAC, the long-term total investment of the joint venture will be more than 3.5 billion yuan (HK$4.14 billion).
Chen Xiaoning, deputy president of GMAC and chairman of ST Aerospace (Guangzhou), estimates the new company's annual turnover will range from US$150 million to US$200 million by 2015.
A GMAC statement said the first two MRO hangers would operating by 2013 and another four or even five would be added within 10 years.
Statistics from the national aviation authorities show the mainland already has more than 2,600 aircraft, or 10 per cent of the world's total.
Li Jiaxiang, director of the China Civil Aviation Administration, estimated that the mainland's aircraft would number more than 4,500 in five years and would at least quadruple in 20 years, Guangzhou-based Nanfang Daily reported yesterday.
Zheng Tianxiang, a Guangzhou-based logistics expert, said the mainland's three aviation hubs - Beijing, Shanghai and Guangzhou - should have sufficient to MRO capacity meet future demand.
With the increase in aircraft numbers since FedEx opened its Asia-Pacific hub in Guangzhou two years ago, ST Aerospace (Guangzhou) is an important investment for the city's aviation industry, Zheng said. 'It is backed by the Guangdong and Singapore governments, who in the past few years have strengthened their business partnership and launched several big projects, such as the Knowledge City in Guangzhou.'
ST Aerospace is an arm of ST Engineering, which is owned by Temasek Holdings, the Singapore government's investment vehicle.
It also set up a joint venture for MRO in Shanghai with China Eastern Airlines in 2005.
The new facility will help China be self-sufficient in aircraft maintenance
The total investment in yuan of the GMAC/ST Engineering joint venture: 3.5b
The proportion of the world's aircraft owned or operated by mainland airlines: 10%