Home' Asian Aviation : AAV_June2012 Contents 18 AsianAviation | JUNE 2012
Chang says a key issue is whether there is enough
lead time to do the repair rotables elsewhere. "We
want a world class supply chain," he says. "We want
more consolidation of centres of excellence."
The Madrid Aerospace Services joint venture with
Iberia is doing very well, notes Chang. "There is room
to grow that."
Madrid Aerospace Services handles landing gear
for the A320, A330 and A340. "We could do Boeing
as well, which is currently done in Oslo. We could
combine and see what we can do with [Iberia and
British Airways parent] IAG. Our business presence
in Europe is something we value quite a bit and we're
trying to see how we can do better."
In China, ST Aerospace already has an established
presence through STARCO, its joint venture with
China Eastern in Shanghai. A significant expansion of
ST Aerospace's China presence is now in the offing:
ST Aerospace (Guangzhou) Aviation Services, a joint
venture with Guangdong Airport Management, is due
to open a two-bay widebody hangar at Guangzhou
Baiyun Airport in the first quarter of next year, initially
focusing on line maintenance.
Chang has no qualms about going head-to-head
against Gameco, the joint venture between China
Southern and Hutchison Aircraft Maintenance
Investment, which is already an established presence
He says: "Currently there is not much of an option
for line maintenance at Guangzhou. It's going to be
a big hub and the market is going to be big enough
for two to three players. We could even put our PTF
work in there in the future - as long as Chinese costs
continue to remain reasonable."
Having established a relationship with one of the
'big three' in China, which Chang says is a must-
do for a successful strategy in the country, ST
Aerospace is positioning itself to serve the rest.
"We're with China Eastern in Shanghai, but there
are a lot of underserved airlines like Hainan Airlines
[and] Spring Airlines that are independent from the
big groups. We have a big three solution - then what
about the rest of the airlines -- how do we serve
them?" he asks.
Other possibilities in China include looking west.
"That's something that can be contemplated if we
have a good partner. But it would be more part of a
wider strategy in China, either with China Eastern or
with another partner that comes into our Guangzhou
facility - but not by ourselves."
Engine MRO is a key market for ST Aerospace, and
one that it intends to grow. Currently, the company
is mainly focused on the CFM International CFM56-
3/-5B/-7 engines, and while the -3 is in the "last
phase of its life", as Chang puts it, the -5B and -7
are very much alive. A significant uptake is expected
late 2013 and early 2014 onwards and Chang says:
"We're building up capacity to be well-positioned to
take care of that uptake."
The company's Singapore engine MRO
capability is now complemented by ST Aerospace
Technologies (Xiamen), which is in the early stages
of development. The new unit expects to handle up to
15 engines this year as it gradually builds up steam,
focusing on the CFM56-7 for the time being. "We're
on track and very happy with the quality achieved on
the first two engines," says Chang.
The capacity of the Xiamen facility is around 100
engines per year, but it will take time to train up the
labour force to achieve that, Chang explains.
"We have about 50 people there now, we need to
get it to about 300 in the next three years," he says.
"I'd hope to get to 100 engines by then, which would
be timed for the peak. By then, Xiamen could also
handle the -5B," Chang says.
Meanwhile, ST Aerospace has gone into the
engine-leasing business -- its goal it to have a
portfolio worth US$100 million by the year's end,
comprising 10-12 CFM56 engines. Total Engine
Asset Management, as it is known, is a joint venture
with Marubeni of Japan.
Chang describes it as a "very interesting"
investment. "The plan is to grow bigger in line with
Marubeni. Over the next five years it could get to
30-50 engines," he says.
ST Aerospace, which manages around 550
engines on a Maintenance-By-the-Hour basis, can
"We hope to grow the US business either
by acquisition or by organic growth." --
ST Aerospace President Chang Cheow Teck
Eventually, ST Aerospace may shift heavy maintenance work to lower-cost locations.
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