Hong Kong Aircraft Engineering Co (Haeco), which maintains and overhauls commercial engines, said yesterday Boeing had agreed to provide its Xiamen joint venture with a licence to convert passenger aircraft into cargo planes. Managing director John Slosar said this would make Taikoo (Xiamen) Aircraft Engineering Co (Taeco) one of only three operations in the world able to carry out such conversions. The agreement comes after Boeing last month took a 9.1 per cent stake in Taeco, in which Haeco has a controlling 41.82 per cent stake. Mr Slosar said such conversions could become lucrative for Taeco and might account for up to 20 per cent of its business over the next decade. He said: 'We believe there will be a lot of Boeing 747s converted to freighters over coming years and there will be a good market for that type of work. 'It will provide a nice steady business to keep us going.' Mr Slosar said Boeing had forecast 200 ageing passenger aircraft could need converting into freighters during the next 10 to 15 years. He said Taeco would be looking to perform three to four such conversions a year beginning in the first quarter of 1999. Taeco was formed in 1993 as a joint venture between Haeco and five other parties, including the Xiamen government, the Civil Aviation Administration of China, Cathay Pacific Airways, Singapore Airlines, and Japan Airlines. Taeco produced its first positive contribution to Haeco in the first half of this year due to strong demand from shareholder airlines and new customers. The company recently started the construction of a second two-bay hangar, costing US$50 million, to expand its capacity. Boeing said it had purchased its $11 million stake in Taeco to strengthen its relationships in the mainland.