Hongkong Aircraft Engineering Company (Haeco) plans to boost manpower at its operation in Xiamen in Fujian province by 1,000, after last year's controversial announcement to lay off staff and slash salaries. Haeco, which maintains and overhauls aircraft and aircraft engines, is to build a new hangar in Xiamen this year. Some 200 mainland engineers and workers have been flown to Hong Kong for training in preparation for the third-phase development of the Xiamen operation, which is expected to cost about US$55 million. Haeco's operations in Xiamen are part of Taikoo (Xiamen) Aircraft Engineering Company (Taeco), a joint venture with several airlines and mainland-backed aviation and technology firms. Haeco owns about 42 per cent of Taeco. Taeco chairman and managing director Chan Ping-kit yesterday said his company intended to build a two-bay hangar next to the existing two hangars. The new hangar was expected to be built using identical plans to the existing two facilities, which cost about US$55 million each. The first hangar in the Xiamen compound was opened in 1996. The second was commissioned last year. Mr Chan said the plan was implemented amid signs of recovery of the aviation and travel business after the Asian financial turmoil. However he declined to predict how long it would take to have the new hangar fully operational. Construction alone could be as long as 18 months. Manpower planning was underway and Mr Chan expected the number of workers at Taeco eventually would expand from the current 1,600 to 2,600. The company plans to employ mostly from the mainland and only 100 are to be enlisted from Hong Kong, according to Mr Chan. The salary of a mainland worker is about 40 per cent of that of a Hong Kong worker, according to Mr Chan. He said around half of the cost of the new hangar was expected to be financed by bank loans and the company also planned to negotiate management contracts at some mainland airports. Mr Chan, who was accompanied by senior Taeco officers to inspect the Xiamen facilities yesterday, said: 'We do not see any reason to lay off staff in the near future. 'The market is growing and we see more airlines are buying new aircraft and flights are more busy too.' He also assured the new recruits there was no plan to cut salaries. Last November 1,000 Haeco workers staged a work-to-rule campaign in protest against new pay rules to cut the overtime allowance by up to 16 per cent amid falling business. At the peak of the industrial action, some of the Xiamen workers were deployed to help maintain services in Hong Kong. Taeco's first-phase project comprised a hangar containing two Boeing 747 bays and one for narrow-bodied aircraft. The second phase was the same size as the first. Completion of the third hangar would enable Taeco to accommodate at least six Boeing 747 aircraft and three Boeing 737 or 757 aircraft simultaneously. Mr Chan also said there were plans to stretch Taeco's hand to Airbus aircraft and this year it would invest US$3 million to buy new tools and accessories to service and maintain Airbus planes.