Rolls-Royce, Air China set up US$380 million engine service joint venture amid US tech export restrictions, travel curbs
- Air China and Rolls-Royce will establish a new maintenance, repair and overhaul facility in Beijing, which is expected to be fully operational by the mid-2030s
- Beijing Aero Engine Services Company will service the Trent 700, Trent XWB-84 and Trent 1000 engines for the widebody passenger jets that are used in Air China’s fleet
China’s leading airline has formed a joint venture with British aerospace firm Rolls-Royce in Beijing for engine service amid growing export restrictions from the United States on advanced technology and curbs on international travel.
The 50:50 joint venture between Air China and Rolls-Royce will establish a new maintenance, repair and overhaul facility in China’s capital, according to a press statement from the British aerospace company on Thursday during the 2022 China International Fair for Trade in Services in Beijing.
The newly established Beijing Aero Engine Services Company will service the Trent 700, Trent XWB-84 and Trent 1000 engines for the widebody passenger jets. Air China has all three engine types in its fleet.
The British aerospace firm said its engines currently power 60 per cent of China’s total widebody fleet, which includes more than 550 aircraft in service or on order.
“The announcement of this [joint venture] is an important milestone for Rolls-Royce in China, where we have been powering the nation’s airlines for more than 50 years,” said Chris Cholerton, president of civil aerospace at Rolls-Royce.
“Air China is a strategic partner for us, having successfully grown together over many years, and I am delighted to now expand our relationship with this exciting partnership in [maintenance, repair and overhaul] and look forward to continued growth of our collaboration.”
The new facility, which is expected to be fully operational by the mid-2030s, “will provide services to Air China as well as its other airline customers based in Greater China and beyond”, the Rolls-Royce statement said, although it did not provide the investment amount.
The state-backed Beijing Youth Daily on Thursday quoted an unnamed official within the economic zone of Beijing Capital International Airport, where the new facility will be built, as saying that the project was worth 2.61 billion yuan (US$378 million).
The joint venture “will fill the gap” in high-thrust engine maintenance in China, the unnamed official told the newspaper, adding that the project will promote the development of aviation services, high-end manufacturing, technology research and development in the economic zone.
“With safe operation as top priority, Air China has long been committed to developing aircraft maintenance capabilities and ensuring the reliability of the fleet, meanwhile striving to promote the industrialisation of aircraft maintenance,” said Air China president Ma Chongxian.
“In the future, Air China and Rolls-Royce will continue to deepen our profound partnership and start a new journey of cooperation in the field of high thrust engine maintenance.”
Coronavirus outbreaks have restricted cross-border movement, hurting travel, construction and exhibitions, vice-commerce minister Sheng Qiuping said last week ahead of the service expo in Beijing.
Rolls-Royce has seen its revenues take a hit over the last two years as a result of poor demand for its widebody engines in which it specialises.
Long-haul flights are returning more slowly than regional and domestic trips as more countries are easing travel restrictions in response to the pandemic, however, China still imposes restrictions on international travel.
The joint venture announcement also came amid rising competition between China and US, especially in hi-tech industries such as aviation and semiconductors.